both deviations from the policy rule and a drifting inflation target. Once the inflation target is fixed, the incidence of …

loss function in an inflation-targeting small open economy under a pure commitment policy. Applying the intuition behind … the macroeconomic trilemma, the author examines whether a more open capital market in an inflation-targeting country … investigation reveals that limited capital openness leads to greater pass-through from the exchange rate to domestic inflation …