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Inflation Targeting in Colombia, 2002-2012
Urrutia, Miguel; Hofstetter, Marc; Hamann, Franz - Inter-American Development Bank - 2014
After decades using monetary aggregates as the main instrument of monetary policy and having different varieties of crawling peg exchange rate regimes, Colombia adopted a full-fledged inflation-targeting (IT) regime in 1999, with inflation as the nominal anchor, a floating exchange rate, and the...
Persistent link: https://www.econbiz.de/10010943921
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Inflation Targeting and Quantitative Tightening: Effects of Reserve Requirements in Peru
Armas, Adrián; Castillo, Paul; Vega, Marco - Inter-American Development Bank - 2014
This paper provides an overview of the reserve requirement measures undertaken by the Central Bank of Peru. It provides a rationale for the use of these instruments as well as empirical evidence of their effectiveness. In general, the results show that tightening reserve requirements has the...
Persistent link: https://www.econbiz.de/10010943927
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On the Credibility of Inflation Targeting Regimes in Latin America
Mariscal, Rodrigo; Powell, Andrew; Tavella, Pilar - Inter-American Development Bank - 2014
Inflation targeting has been adopted in a set of emerging economies, including eight countries in Latin America. The success of this regime may depend critically on the credibility of the target and the expectation that the authorities will take appropriate actions if the target is breached....
Persistent link: https://www.econbiz.de/10010944050
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Central Bank Liquidity Management and "Unconventional" Monetary Policies
Kawamura, Enrique; García-Cicco, Javier - Inter-American Development Bank - 2014
This paper presents a small open economy model to analyze the role of central bank liquidity management in implementing … that the central bank uses to manage liquidity in the economy, which creates a role for the central bank balance sheet in … list of eligible collaterals accepted at the liquidity facilities operated by the central bank. These policies have been …
Persistent link: https://www.econbiz.de/10010944371
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Towards a "New" Inflation Targeting Framework: The Case of Uruguay
Sola, Martín; González-Rozada, Martin - Inter-American Development Bank - 2014
Using a dynamic stochastic general equilibrium model with financial frictions, this paper evaluates the effects of a rule that incorporates not only the interest rate but also the legal reserve requirements as instruments of monetary policy. It is found that reserve requirements can be used to...
Persistent link: https://www.econbiz.de/10010944440
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Speed Limit Policies: The Output Gap and Optimal Monetary Policy
Walsh, Carl - CESifo - 2001
In a standard New Keynesian model, a myopic central bank concerned with stabilizing inflation and changes in the output gap will implement a policy under discretion that replicates the optimal, timeless perspective, precommitment policy. By stabilizing output gap changes, the central bank...
Persistent link: https://www.econbiz.de/10005406008
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Hyperbolic Discounting and Positive Optimal Inflation
Graham, Liam; Snower, Dennis - CESifo - 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/10009024848
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International Initiatives to Bring Stability to Financial Integration
Fernández-Arias, Eduardo; Hausmann, Ricardo - Inter-American Development Bank - 1999
Financial liberalization and integration have generated disappointing results. They were supposed to set up a win-win situation: capital would flow from capital-abundant, low-return, aging industrial countries to capital-scarce, high-return, young emerging countries. Growth in receiving...
Persistent link: https://www.econbiz.de/10010944233
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Achieving Stability in Latin American Financial Markets in the Presence of Volatile Capital Flows
Rojas-Suárez, Liliana; Weisbrod, Steven R. - Inter-American Development Bank - 1995
This paper considers whether reserve requirements have been effective in controlling excessive liquidity growth. It … expansion of risky bank credit that often accompanies excessive liquidity expansion. …
Persistent link: https://www.econbiz.de/10010944354
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Back to Keynes?
Ploeg, Frederick Van der - CESifo - 2005
After a brief review of classical, Keynesian, New Classical and New Keynesian theories of macroeconomic policy, we assess whether New Keynesian Economics captures the quintessential features stressed by J.M. Keynes. Particular attention is paid to Keynesian features omitted in New Keynesian...
Persistent link: https://www.econbiz.de/10005181517