This paper investigates empirically how the reaction of monetary policy to exchange rate has changed after the adoption of inflation targeting regime in three East Asian countries. Using a structural VAR and single equation methods, this study shows that the reactions of monetary policy to...

This paper investigates the transmission mechanism of monetary policy and inflation targeting in a small open-economy by using backward-looking of aggregate supply (AS) and aggregate demand (AD) framework. Since September 1998 until July 2005, Malaysia has implemented a currency pegged to the...

There are a lot of studies that test Ballasa –Samuelson hypothesis also known as Harrod-BalassaSamuelson effect directly via the effect of productivity, one possible explanation is that PER Capita GDP is not good explanation for productivity (.i.e. Labor productivity) differences; an increase...

This paper presents the empirical evidence on purchasing power parity (PPP) for Pak-rupee vis-à-vis US-dollar exchange rate using Johansen (1988) and Johansen and Juselius (1990) multivariate cointegration and bound testing approach to cointegration (Pesaran et al., 2001) over the period...

After more than two decades of inflation targeting in the world, it is important to evaluate if the adoption of this regime in a relevant developing country contributed to the creation of a better environment for the process of entrepreneurs' expectations formation. Brazil is part of an...

Inflation Targeting (IT) can be expected to play a role in structurally reducing nominal interest rates, by lowering a country’s inflation expectations and risk premium. Relying on a panel of 52 advanced and emerging economies over the 1975-2009 years, we carry out a formal investigation of...

Introduction of inflation targeting has global effects on dynamic of prices and economic growth. In case of a developing country with an increasing remonetization since 2007 – 2008 and modest growing later than 2009 it’s important to assess the adoption of a new regime and how it helps to...

With the adoption of the Bangko Sentral ng Pilipinas (BSP) of the Inflation Targeting (IT) framework in 2002, average inflation went down in the past decade from historical average. However, the BSP’s inflation targets were breached several times since 2002. Against this backdrop, this paper...

The paper shows the advantages and handicaps of implementing an inflation target (IT) regime, from a Post-Keynesian and, thus, an institutional stance. It is Post-Keynesian as long as it does not perceive any benefit in the mainstream split between monetary and fiscal policies. And it is...

Some countries may face choice between targeting inflation independently and entering a monetary union that targets inflation. This paper shows that the choice of a country in favour of monetary union may be motivated by asymmetrical supply shocks. The demand shocks are neutralised under these...