Commodity Price Movements and Monetary Policy in Asia

Emerging Asian economies typically have high shares of food in their consumption baskets, relatively low monetary policy credibility, and aggressive fiscal interventions in response to rises in international food and energy prices. Under these circumstances, we argue that targeting headline rather than core inflation would be better in the conduct of monetary policy in these economies. We also examine the inflation dynamics associated with commodity price changes in Asian countries.Full publication: "http://ssrn.com/abstract=2248714" Globalisation and Inflation Dynamics in Asia and the Pacific