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The development of empirical foundations to the conduct of monetary policy in Tunisia is the central concern of this paper. Finding stable money demand functions, it broadly corroborates the choice of monetary aggregates as intermediate targets of monetary policy by the Tunisian Central Bank. It...
Persistent link: https://www.econbiz.de/10014403786
This paper explores the behavior of money demand by explicitly accounting for the money supply endogeneity arising from endogenous monetary policy and financial innovations. Our theoretical analysis indicates that money supply factors matter in the money demand function when the money supply...
Persistent link: https://www.econbiz.de/10014401308
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
The paper tests a hypothesis suggested by Taylor (2000) that a low inflationary environment leads to a low exchange rate pass-through to domestic prices. To test this hypothesis, the paper derives a pass-through relation based on new open economy macroeconomic models. A large database that...
Persistent link: https://www.econbiz.de/10014400110
This paper provides evidence on the relationship between monetary policy and the exchange rate in the aftermath of currency crises. It analyzes a large data set of currency crises in 80 countries for the period 1980-98. The main question addressed is: Can monetary policy increase the probability...
Persistent link: https://www.econbiz.de/10014401052
This paper examines some of the key issues in the conduct of Philippine monetary policy since 1984, including the various shocks to the economy and the monetary authorities’ choice of intermediate policy targets and instruments used to achieve those targets. Against this background, estimates...
Persistent link: https://www.econbiz.de/10014396098
The paper evaluates whether a monetary aggregate can serve as a useful predictor of inflation, using recent developments in the principle of cointegrated variables. M2 but not M1 is cointegrated with relevant price, transactions, and rate of return variables. However, deviations of M2 from its...
Persistent link: https://www.econbiz.de/10014395786
Based on the observed behavior of monetary aggregates and exchange rates, we classify inflation-stabilization episodes into two categories: de facto exchange rate-based stabilizations (ERBS) and non-ERBS. Unlike the standard de jure ERBS studied in the literature, de facto ERBS encompass cases...
Persistent link: https://www.econbiz.de/10014400167
In recent years, the decline in inflation in Angola has stalled and further steps may be needed to attain the authorities'' medium term goal of meeting the Southern African Development Community (SADC) convergence criteria of a low single digit inflation rate. A Vector Error Correction (VEC)...
Persistent link: https://www.econbiz.de/10014402500
Based on VAR analyses across 26 countries, we show that, although foreign exchange intervention (FXI) is effective in stabilizing the nominal exchange rate in the short run, its impacts on the real exchange rate are less significant: Limitations on nominal exchange rate flexibility may induce...
Persistent link: https://www.econbiz.de/10012613705