exchange rate pass-through. The results indicate that social welfare can only be marginally improved by including an explicit … exchange rate, through Consumer Price Index (CPI) inflation targeting is, however, beneficial. Welfare can, moreover, be … result of surpassing some of the stabilization bias arising under a discretionary policy. Consequently, there are welfare …

-through. Implementing monetary policy through an exchange-rate augmented policy rule does not improve social welfare compared to using an … reaction to Consumer Price Index (CPI) inflation rather than to domestic inflation, is welfare enhancing in all pass … where a direct real exchange rate response is slightly welfare improving occurs when the other reaction coefficients, on …