We examine the relative ability of simple inflation targeting (IT) and price level targeting (PLT) monetary policy rules to minimize both inflation variability and business cycle fluctuations in Canada for shocks that have important consequences for global commodity prices. We find that...

Many commentators have argued that if the Federal Reserve had followed a stricter monetary policy earlier this decade when the housing bubble was forming, and if Congress had not deregulated banking but had imposed tighter financial standards, the housing boom and bust - and the subsequent...

This study analyzes global inflation synchronization and derives policy implications for the Korean economy. Unlike previous studies that assume a single global inflation factor, this study investigates if inflation in Korea can be explained further by other global inflation factors. Our...

Recent energy and food price surges, in the wake of Russia's invasion of Ukraine, have exacerbated inflation pressuresthat are unusually high by the standards of the past two decades. High and rising inflation has prompted many emerging market and developing economy (EMDE) central banks and some...

This paper builds and estimates a small open economy New Keynesian DSGE model, specified with an international banking sector, in order to explore the effectiveness of alternative monetary police regimes to isolate the domestic economy from global financial cycles. Using an increase to the...

The recent global economic crisis originated in the midst of a commodity price boom that had triggered sharp increases in inflation in many world countries. The crisis also came in the context of a rally in asset prices and large domestic imbalances in the United States. This paper uses a small...

We show that exchange rate pass-through to consumer prices varies not only across countries, but also over time. Previous literature has highlighted the role of an economy's ‘structure' — such as its inflation volatility, inflation rate, use of foreign currency invoicing, and openness — in...

This paper revises and extends PIIE Working Paper 20-6. It continues to find strong support for a Phillips curve that becomes nonlinear when inflation is “low”—which our baseline model defines as less than 3 percent. The nonlinear curve is steep when output is above potential (slack is...

Inflation dynamics have been difficult to explain over the last decade. This paper explores if a more comprehensive treatment of globalization can help. CPI inflation has become more synchronized around the world since the 2008 crisis, but core and wage inflation have become less synchronized....