A dynamic stochastic general equilibrium monetary model with incomplete and imperfect asset markets, monopolistic competition and staggered nominal price rigidities is developed to shed light on the role of exchange rate and its relation with current account dynamics in the formulation of...

Abstract Under the assumption of perfect capital mobility, inflation targeting (IT) requires central banks to primarily focus on domestic inflation and to let their exchange rate float freely. This is consistent with the macroeconomic trilemma suggesting monetary independence, perfect capital...

With the numerous monetary policy reforms undertaken during the 1990s, inflation targeting emerged as one of the possible solutions. The macroeconomic performance of this regime has attracted the attention of recent research, yet no final consensus on its role is reached. The aim of this paper...

This paper analyzes the response of the stock market returns to monetary policy decisions by the Central Bank of Chile. It adopts the event-study methodology in order to gauge the influence of anticipated and unanticipated changes in the Chilean monetary policy interest rate (TPM), decided in...

This paper presents a brief description of the operation of Brazil's Inflation Targeting regime, and an evaluation of its performance since its introduction in June 1999 until 2006.The performance of the regime is evaluated comparing the observed inflation values with the officially announced...

A sufficient and appropriate degree of central bank independence is widely acknowledged to be necessary for the goal of achieving price stability. However, despite the levels of independence claimed to be enjoyed by several central banks, recent events indicate shifts in focus of monetary policy...

The paper explains the expediency of developing an explicit rule of monetary policy for the economy of Ukraine. It studies the stages of its development, proving the expediency of formation of monetary rules for money aggregates, evaluates equilibrium values of the rule’s parameters based on...

Since its adoption of inflation targeting in 2000, the South African Reserve Bank has been accused of placing too great an emphasis on meeting its inflation target, and too small an emphasis on the high rate of unemployment in the country. On the other hand, the SARB has regularly missed its...

This article focuses on inflation targeting (hereafter IT) as a superior monetary policy strategy for attaining price stability, and its theoretical framework, prerequisites to introduce. The article analyses benefits and costs of adoption of inflation targeting and also examines the IT...