Similar Search Results

Inflation Targeting and Debt: Lessons from Brazil

Favero, Carlo A.; Giavazzi, Francesco - C.E.P.R. Discussion Papers - 2004

A single variable describes, day-by-day, what investors think about the state of Brazil's economy: the Brazilian … markets' assessment of the probability that Brazil might default on its debt obligations. This is mainly because the cost of … domestic interest rates, is thus the necessary first step in order to understand macroeconomic developments in Brazil. The …

Persistent link: https://www.econbiz.de/10005123784

Hyperbolic Discounting and Positive Optimal Inflation

Graham, Liam; Snower, Dennis J. - C.E.P.R. Discussion Papers - 2011

The Friedman rule states that steady-state welfare is maximized when there is deflation at the real rate of interest. Recent work by Khan et al. (2003) uses a richer model but still finds deflation optimal. In an otherwise standard new Keynesian model we show that, if households have hyperbolic...

Persistent link: https://www.econbiz.de/10009643503

The role of central bank transparency for guiding private sector forecasts

Ehrmann, Michael; Eijffinger, Sylvester C W; … - C.E.P.R. Discussion Papers - 2009

There is a broad consensus in the literature that costs of information processing and acquisition may generate costly disagreements in expectations among economic agents, and that central banks may play a central role in reducing such dispersion in expectations. This paper analyses empirically...

Persistent link: https://www.econbiz.de/10008458290

Central Bank Independence: An Update of Theory and Evidence

Berger, Helge; de Haan, Jakob; Eijffinger, Sylvester C W - C.E.P.R. Discussion Papers - 2000

This paper reviews recent research on central bank independence (CBI). After we have distinguished between independence and conservativeness, the literature on optimal inflation contracts is discussed, followed by research in which the inflationary bias is endogenized. Finally, the various...

Persistent link: https://www.econbiz.de/10005662256

Monetary Policies for Developing Countries: The Role of Institutional Quality

Huang, Haizhou; Wei, Shang-Jin - C.E.P.R. Discussion Papers - 2005

Weak public institutions, including high levels of corruption, characterize many developing countries. With a simple model, we demonstrate that institutional quality has important implications for the design of monetary policies and can produce several departures from the conventional wisdom. We...

Persistent link: https://www.econbiz.de/10005789083

Strong Goal Independence and Inflation Targets

Baltensperger, Ernst; Fischer, Andreas M; Jordan, Thomas J. - C.E.P.R. Discussion Papers - 2006

Inflation targeting has become the monetary policy framework of the nineties. At the other extreme, several central banks have recently adopted key elements of the inflation targeter's toolkit, but at the same time they have made formal declarations that they are not inflation targeters. Such a...

Persistent link: https://www.econbiz.de/10005791226

Assessing Inflation Persistence: Micro Evidence on an Inflation Targeting Economy

Babecký, Jan; Coricelli, Fabrizio; Horváth, Roman - C.E.P.R. Discussion Papers - 2009

The paper provides an empirical analysis of inflation persistence in one of inflation targeting countries, the Czech Republic, using 412 detailed product-level consumer price indexes underlying the consumer basket over the period from 1994 to 2005. Subject to various sensitivity tests, our...

Persistent link: https://www.econbiz.de/10005791254

The Inflation Forecast and the Loss Function

Svensson, Lars E O - C.E.P.R. Discussion Papers - 2002

This Paper argues that inflation-targeting central banks should announce explicit loss function with numerical relative weights on output-gap stabilization and use and announce optimal time-varying instrument-rate paths and corresponding inflation and output-gap forecasts. Simple voting...

Persistent link: https://www.econbiz.de/10005791438

Performance of Inflation Targeting Based on Constant Interest Rate Projections

Honkapohja, Seppo; Mitra, Kaushik - C.E.P.R. Discussion Papers - 2003

Monetary policy is sometimes formulated in terms of a target level of inflation, a fixed time horizon and a constant interest rate that is anticipated to achieve the target at the specified horizon. These requirements lead to constant interest rate (CIR) instrument rules. Using the standard New...

Persistent link: https://www.econbiz.de/10005791491

Inflation Targeting in a Small Open Economy

Sutherland, Alan - C.E.P.R. Discussion Papers - 2001

A small open economy model is presented, which allows explicit treatment of uncertainty and its effects on macroeconomic behaviour. Inflation targeting is compared to the welfare maximizing monetary rule and to a fixed nominal exchange rate. It is found that flexible inflation targeting produces...

Persistent link: https://www.econbiz.de/10005791982