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Interest Rate Rules, Inflation Stabilization, and Imperfect Credibility : The Small Open Economy Case

Calvo, Guillermo A. - 2007

distortion, e.g., underutilization of capacity and real exchange rate misalignment. However, while under imperfect credibility … by imperfect credibility …

Persistent link: https://www.econbiz.de/10012465476

Open-Economy Inflation Targeting

Svensson, Lars E. O. - 2000

The paper extends previous analysis of closed-economy inflation targeting to a small open economy with forward-looking aggregate supply and demand with some microfoundations, and with stylized realistic lags in the different transmission channels for monetary policy. The paper compares targeting...

Persistent link: https://www.econbiz.de/10012471032

The Simplest Test of Target Zone Credibility

Svensson, Lars E.O. - 1990

outside these rate-of-return bands can be used as a simple test of exchange rate credibility, under the assumption of …

Persistent link: https://www.econbiz.de/10012475639

Monetary Policy and Exchange Rate Volatility in a Small Open Economy

Gali, Jordi - 2002

We lay out a small open economy version of the Calvo sticky price model, and show how the equilibrium dynamics can be reduced to a tractable canonical system in domestic inflation and the output gap. We employ this framework to analyze the macroeconomic implications of three alternative monetary...

Persistent link: https://www.econbiz.de/10012469809

The Use and Meaning of Words in Central Banking : Inflation Targeting, Credibility, and Transparency

Friedman, Benjamin M. - 2002

Inflation targeting offers the promise of introducing to monetary policy a logic and consistency that some central banks' deliberations sorely missed in the past. At least in today's inherited monetary policymaking context, however, inflation targeting also serves two further objectives that are...

Persistent link: https://www.econbiz.de/10012469742

The Swedish Experience of an Inflation Target

Svensson, Lars E.O. - 1995

to remedy the problems; and draws some general conclusions. The two main current problems are the lack of credibility of … the target and the significant risk that the target will be missed. The reasons for the lack of credibility include the …

Persistent link: https://www.econbiz.de/10012473913

Taylor Rules in a Limited Participation Model

Christiano, Lawrence J. - 1999

We use the limited participation model of money as a laboratory for studying the operating characteristics of Taylor rules for setting the rate of interest. Rules are evaluated according to their ability to protect the economy from bad outcomes such as the burst of inflation observed in the...

Persistent link: https://www.econbiz.de/10012471783

Contracts, Credibility, and Disinflation

Fischer, Stanley - 1984

Estimates of the cost of disinflation made before the recent reduction in the inflation rate varied widely. Estimates were made in terms of the sacrifice ratio -- the percentage points of GNP at an annual rate lost per percentage point reduction in the inflation rate. At one extreme it was...

Persistent link: https://www.econbiz.de/10012477755

The Role of Output Stabilization in the Conduct of Monetary Policy

Mishkin, Frederic S. - 2002

credibility of the central bank. In contrast, conducting monetary policy with a flexible inflation target rule is likely to …

Persistent link: https://www.econbiz.de/10012469417

Transparency and Credibility : Monetary Policy with Unobservable Goals

Faust, Jon - 1998

We define and study transparency, credibility, and reputation in a model where the central bank's characteristics are … unobservable to the private sector and are inferred from the policy outcome. A low-credibility bank optimally conducts a more … inflationary policy than a high-credibility bank, in the sense that it induces higher inflation, but a less expansionary policy in …

Persistent link: https://www.econbiz.de/10012472353

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