Monetary Policy Rules for Financially Vulnerable Economies - read free eBook in online reader or directly download on the web page. Select files or add your book in reader. Download and read online ebook Monetary Policy Rules for Financially Vulnerable Economies write by Mr.Eduardo Morón. This book was released on 2003-02-01. Monetary Policy Rules for Financially Vulnerable Economies available in PDF, EPUB and Kindle. One distinguishable characteristic of emerging market economies is that they are not financially robust. These economies are incapable of smoothing out large external shocks, as sudden capital outflows imply large and abrupt swings in the real exchange rate. Using a small open-economy model, this paper examines alternative monetary policy rules for economies with different degrees of liability dollarization. The paper answers the question of how efficient it is to use inflation targeting under high liability dollarization. Our findings suggest that it might be optimal to follow a nonlinear policy rule that defends the real exchange rate in a financially vulnerable economy.
A Comparison of Monetary Policy Rules for a Financially Vulnerable Economy
A Comparison of Monetary Policy Rules for a Financially Vulnerable Economy - read free eBook in online reader or directly download on the web page. Select files or add your book in reader. Download and read online ebook A Comparison of Monetary Policy Rules for a Financially Vulnerable Economy write by Gongpil Choi. This book was released on 2014. A Comparison of Monetary Policy Rules for a Financially Vulnerable Economy available in PDF, EPUB and Kindle. A small, open macro model with new transmission channels is developed to account for the post-crisis structural changes and to evaluate various policy rules for inflation targeting. Given significant changes in transmission channels and the lingering fragility in the financial sector, policy response itself can seriously accentuate the endogenous financial accelerator effect. Under the prevailing policy constraints, various forms of inflation targeting with emphasis on long-term inflation expectations, output changes, and the asset price channels are compared using simulation results based on a newly constructed model. It turns out that successful outcome is obtained by adhering to forward-looking simple rules in favor of backward-looking comprehensive policy rules. Above all, even with the dominant role of financial vulnerability in emerging market developments, simulation studies reveal that price as well as output stability that can be better achieved under a certain type of policy rules by helping to keep the financial accelerator from being activated. A further caveat for implementing inflation targeting in emerging economies is to use it as a unifying policy framework in which the environment for long-term capital market development can be promoted.
Hybrid Inflation Targeting Regimes
Hybrid Inflation Targeting Regimes - read free eBook in online reader or directly download on the web page. Select files or add your book in reader. Download and read online ebook Hybrid Inflation Targeting Regimes write by Jorge Restrepo. This book was released on 2009-10-01. Hybrid Inflation Targeting Regimes available in PDF, EPUB and Kindle. This paper uses a DSGE model to examine whether including the exchange rate explicitly in the central bank's policy reaction function can improve macroeconomic performance. It is found that including an element of exchange rate smoothing in the policy reaction function is helpful both for financially robust advanced economies and for financially vulnerable emerging economies in handling risk premium shocks. As long as the weight placed on exchange rate smoothing is relatively small, the effects on inflation and output volatility in the event of demand and cost-push shocks are minimal. Financially vulnerable emerging economies are especially likely to benefit from some exhange rate smoothing because of the perverse impact of exchange rate movements on activity.
Monetary Policy Rules
Monetary Policy Rules - read free eBook in online reader or directly download on the web page. Select files or add your book in reader. Download and read online ebook Monetary Policy Rules write by John B. Taylor. This book was released on 2007-12-01. Monetary Policy Rules available in PDF, EPUB and Kindle. This timely volume presents the latest thinking on the monetary policy rules and seeks to determine just what types of rules and policy guidelines function best. A unique cooperative research effort that allowed contributors to evaluate different policy rules using their own specific approaches, this collection presents their striking findings on the potential response of interest rates to an array of variables, including alterations in the rates of inflation, unemployment, and exchange. Monetary Policy Rules illustrates that simple policy rules are more robust and more efficient than complex rules with multiple variables. A state-of-the-art appraisal of the fundamental issues facing the Federal Reserve Board and other central banks, Monetary Policy Rules is essential reading for economic analysts and policymakers alike.
Monetary Policy in Low Financial Development Countries
Monetary Policy in Low Financial Development Countries - read free eBook in online reader or directly download on the web page. Select files or add your book in reader. Download and read online ebook Monetary Policy in Low Financial Development Countries write by Juan Antonio Morales. This book was released on 2021-07-22. Monetary Policy in Low Financial Development Countries available in PDF, EPUB and Kindle. Monetary Policy in Low Financial Development Countries provides a broad coverage of the monetary policy issues faced by developing countries with low financial depth. These low and lower middle income countries are characterized by the predominance of bank finance, shallow financial markets, low financial inclusion, weak integration with world capital markets, and a high degree of informality in economic activity. Monetary policy acquires special twists, making it different in many aspects from the policies followed in advanced and emerging market economies. This book covers the main facets of monetary policy making, using an approach that combines discussions of theoretical arguments, of results from empirical studies and of relevant policy experiences. It presents the monetary policy instruments that central banks rely on in these countries. It assesses the specificities of their monetary transmission mechanism, i.e. the way central banks' actions affect output and prices. It evaluates the advantages, drawbacks, and challenges of the different nominal anchors they may choose from: exchange rate targeting, monetary targeting, and inflation targeting. This discussion is set against the background of the three main goals pursued by central banks: price, output, and financial stability. Particular attention is devoted to the issue of the credibility of central banks and to the trade-offs they face when external shocks, to which these countries are very vulnerable, lead to conflicts among the three goals they pursue. The authors also cover more specific topics, such as the coordination between monetary and fiscal policy, the challenges raised by dollarization, the implications of informal labour markets and of microfinance institutions for monetary policy-making, as well as the role of models for forecasting and policy evaluation by central banks.
