Author: Neil RankinPublisher:
ISBN:
Category : Cuestión monetaria - Modelos matemáticos
Languages : en
Pages : 33
Book Description
Nominal Rigidity and Monetary Uncertainty in a Small Open Economy
Author: Neil RankinPublisher:
ISBN:
Category : Cuestión monetaria - Modelos matemáticos
Languages : en
Pages : 33
Book Description
Nominal Rigidity and Monetary Uncertainty
Author: Neil RankinPublisher:
ISBN:
Category : Inflation (Finance)
Languages : en
Pages : 44
Book Description
Monetary Policy and Uncertainty in an Empirical Small Open Economy Model
Author: Alejandro JustinianoPublisher:
ISBN:
Category : Monetary policy
Languages : en
Pages : 0
Book Description
This paper explores optimal policy design in an estimated model of three small open economies: Australia, Canada and New Zealand. Within a class of generalized Taylor rules, we show that to stabilize a weighted objective of output, consumer price inflation and nominal interest variation optimal policy does not respond to the nominal exchange. This is despite the presence of local currency pricing and due, in large part, to observed exchange rate disconnect in these economies. Optimal policies that account for the uncertainty of model estimates, as captured by the parameters' posterior distrbution, similarly exhibit a lack of exchange rate response. In contrast to Brainard (1967), the presence of parameter uncertainty can lead to more or less aggressive policy responses, depending on the model at hand.
International Finance and Open-Economy Macroeconomics
Author: Giancarlo GandolfoPublisher: Springer Science & Business Media
ISBN: 9783540417309
Category : Business & Economics
Languages : en
Pages : 648
Book Description
"This book deals with the financial side of international economics and covers all aspects of international finance. There are many books and articles by exponents of alternative points of view. I know of no other book that provides the scope, balance, objectivity and rigor of the book." (Professor Jerome L. Stein, Brown University) From the reviews: "In this survey of international finance and open-economy macroeconomics, Gandolfo succeeds in meeting the needs of advanced undergraduate or lower-level graduate students through a largely textual and graphical approach, while at the same time presenting in the appendices explicit mathematical analyses for more advanced graduate students." (Journal of Banking & Finance 2004)
Designing a Simple Loss Function for Central Banks
Author: Davide DebortoliPublisher: International Monetary Fund
ISBN: 1484311752
Category : Business & Economics
Languages : en
Pages : 56
Book Description
Yes, it makes a lot of sense. This paper studies how to design simple loss functions for central banks, as parsimonious approximations to social welfare. We show, both analytically and quantitatively, that simple loss functions should feature a high weight on measures of economic activity, sometimes even larger than the weight on inflation. Two main factors drive our result. First, stabilizing economic activity also stabilizes other welfare relevant variables. Second, the estimated model features mitigated inflation distortions due to a low elasticity of substitution between monopolistic goods and a low interest rate sensitivity of demand. The result holds up in the presence of measurement errors, with large shocks that generate a trade-off between stabilizing inflation and resource utilization, and also when ensuring a low probability of hitting the zero lower bound on interest rates.
Inflation Targeting and Exchange Rate Management In Less Developed Countries
Author: Mr.Marco AiraudoPublisher: International Monetary Fund
ISBN: 1475523165
Category : Business & Economics
Languages : en
Pages : 65
Book Description
We analyze coordination of monetary and exchange rate policy in a two-sector model of a small open economy featuring imperfect substitution between domestic and foreign financial assets. Our central finding is that management of the exchange rate greatly enhances the efficacy of inflation targeting. In a flexible exchange rate system, inflation targeting incurs a high risk of indeterminacy where macroeconomic fluctuations can be driven by self-fulfilling expectations. Moreover, small inflation shocks may escalate into much larger increases in inflation ex post. Both problems disappear when the central bank leans heavily against the wind in a managed float.
The Effectiveness of Fiscal Policy in Stimulating Economic Activity
Author: Richard HemmingPublisher: International Monetary Fund
ISBN:
Category : Business & Economics
Languages : en
Pages : 62
Book Description
This paper reviews the theoretical and empirical literature on the effectiveness of fiscal policy. The focus is on the size of fiscal multipliers, and on the possibility that multipliers can turn negative (i.e., that fiscal contractions can be expansionary). The paper concludes that fiscal multipliers are overwhelmingly positive but small. However, there is some evidence of negative fiscal multipliers.
Working Paper Series
Author: International Macroeconomics
Author: Stephanie Schmitt-GrohéPublisher: Princeton University Press
ISBN: 0691170649
Category : Business & Economics
Languages : en
Pages : 482
Book Description
An essential introduction to one of the most timely and important subjects in economics International Macroeconomics presents a rigorous and theoretically elegant treatment of real-world international macroeconomic problems, incorporating the latest economic research while maintaining a microfounded, optimizing, and dynamic general equilibrium approach. This one-of-a-kind textbook introduces a basic model and applies it to fundamental questions in international economics, including the determinants of the current account in small and large economies, processes of adjustment to shocks, the determinants of the real exchange rate, the role of fixed and flexible exchange rates in models with nominal rigidities, and interactions between monetary and fiscal policy. The book confronts theoretical predictions using actual data, highlighting both the power and limits of given theories and encouraging critical thinking. Provides a rigorous and elegant treatment of fundamental questions in international macroeconomicsBrings undergraduate and master’s instruction in line with modern economic researchFollows a microfounded, optimizing, and dynamic general equilibrium approachAddresses fundamental questions in international economics, such as the role of capital controls in the presence of financial frictions and balance-of-payments crisesUses real-world data to test the predictions of theoretical modelsFeatures a wealth of exercises at the end of each chapter that challenge students to hone their theoretical skills and scrutinize the empirical relevance of modelsAccompanied by a website with lecture slides for every chapter
Monetary Policy Transmission in Emerging Markets and Developing Economies
Author: Mr.Luis Brandao-MarquesPublisher: International Monetary Fund
ISBN: 1513529730
Category : Business & Economics
Languages : en
Pages : 54
Book Description
Central banks in emerging and developing economies (EMDEs) have been modernizing their monetary policy frameworks, often moving toward inflation targeting (IT). However, questions regarding the strength of monetary policy transmission from interest rates to inflation and output have often stalled progress. We conduct a novel empirical analysis using Jordà’s (2005) approach for 40 EMDEs to shed a light on monetary transmission in these countries. We find that interest rate hikes reduce output growth and inflation, once we explicitly account for the behavior of the exchange rate. Having a modern monetary policy framework—adopting IT and independent and transparent central banks—matters more for monetary transmission than financial development.