This paper is being prepared for the 2010 international conference of the Institute for Monetary and Economic Studies of the Bank of Japan, gThe Future of Central Banking under Globalization,h to be held May 26-27, 2010, in Tokyo. I am grateful to Marvin Goodfriend for helpful discussions.

The Monetary Authority of Singapore (MAS) conducts policy by adjusting the Singapore dollarfs effective exchange rate so as to achieve macroeconomic goals for the economyfs inflation rate and output gap. Estimates of a policy rule of the Taylor type, except with exchange rate appreciation...

It is well known that the concept of "determinacy"-a single stable solution-plays a major role in contemporary monetary policy analysis. But while determinacy is desirable, other things equal, it is not necessary for a solution to be plausible and is not sufficient for a solution to be...