This paper reviews the recent literature on monetary policy rules. In particular, we discuss the theoretical framework underlying different monetary policy strategies. Currently, many central banks are implementing a scheme of monetary policy where the main instrument and indicator of it, is a...

This paper attempts to describe Chilean monetary policy during the first half of the 90s. During that period, an explicit exchange rate target zone prevailed. The center of the exchange rate band was set according to a real exchange rate rule (RERR). The Central Bank's main objective in the...

This paper reviews recent developments on central banking. The first part discusses the institutions irrelevance hypothesis raised by Posen. According to this view, the central bank independence (CBI) effectiveness as an arrangement for achieving a low inflation rate depends heavily upon the...

This paper examines the relationship between the real exchange rate and real wages. It is assumed that the sector that produces non-tradeable goods is labor intensive. This assumption determines an inverse correlation between both variables in equilibrium