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The paper explores how international integration through global value chains shapes the working of exchange rates to induce external adjustment both in the short and medium run. The analysis indicates that greater integration into international value chains reduces the exchange rate elasticity...
Persistent link: https://www.econbiz.de/10012155213
This paper evaluates the performance of two alternative policy rules, a forward-looking rule and a spontaneous adjustment rule, under alternative inflation targets, in terms of output losses in a macroeconomic model, using European Union data. The simulations suggest that forward-looking rules...
Persistent link: https://www.econbiz.de/10014400852
We provide a multidimensional characterization of monetary policy frameworks across three pillars: Independence and Accountability, Policy and Operational Strategy, and Communications (IAPOC). We construct the IAPOC index by analyzing central banks' laws and websites for 50 advanced economies,...
Persistent link: https://www.econbiz.de/10013170321
How should monetary policy respond to large fluctuations in world food prices? We study this question in an open … response to world food price shocks. This exacerbates the policy trade-off between stabilizing output prices vis a vis the real …
Persistent link: https://www.econbiz.de/10014395164
The paper considers the merits of rules and discretion for monetary policy when the structure of the macroeconomic model and the probability distributions of disturbances are not well defined. It is argued that when it is costly to delay policy reactions to seldom-experienced shocks until formal...
Persistent link: https://www.econbiz.de/10014395820
The global financial crisis has exposed the limitations of a conventional inflation targeting (IT) framework in insulating an economy from shocks, and demonstrated that its rigid application may aggravate the effect of shocks on output and inflation. Accordingly, we investigate possible...
Persistent link: https://www.econbiz.de/10014398317
world slowdown helped avert the worse, but inflation stayed high in many inflation targeting countries. This paper uses a …
Persistent link: https://www.econbiz.de/10014402498
This paper develops a structural macroeconometric model of the world economy, disaggregated into thirty five national … economies. This panel unobserved components model features a monetary transmission mechanism, a fiscal transmission mechanism …
Persistent link: https://www.econbiz.de/10014396392
This paper develops a panel unobserved components model of the monetary transmission mechanism in the world economy …
Persistent link: https://www.econbiz.de/10014403179
This paper applies the maximum likelihood panel cointegration method of Larsson and Lyhagen (2007) to test the strong …
Persistent link: https://www.econbiz.de/10014401245