Theoretical Notes on Commodity Prices and Monetary Policy

These notes provide a non-technical introduction to recent models of monetary policy response to commodity price shocks, with emphasis on the choice between targeting the headline consumer price index vs. a measure of core prices, and the reaction to global sources of inflation when inflexible exchange rate regimes represent a source of distortion in world commodity markets.Full publication: "http://ssrn.com/abstract=2248714" Globalisation and Inflation Dynamics in Asia and the Pacific