This study presents a small New Keynesian model of Israel’s economy describing the relationships among the main variables relevant to the transmission mechanism of monetary policy. The model encompasses three structural equations––for inflation, the output gap, and the exchange...

In this paper we examine whether or not the NKM is .t for the purpose of providing a suitable basis for the conduct of monetary policy through inflation targeting. We focus on a number of issues: the dynamic response of inflation to interest rates in a theoretical NKM under discretion and...

This paper analyses optimal monetary policy in response to shocks using a model that avoids making specific assumptions about the stickiness of prices, and thus the nature of the Phillips curve. Nonetheless, certain robust features of the optimal monetary policy commitment are found. The optimal...

This paper investigates whether the adoption of inflation targeting (IT), by strengthening central bank independence and maintaining inflation at low levels, has encouraged the governments of emerging economies to improve the collection of domestic tax revenue in order to recoup the loss of...

Following the Asian financial crisis in 1997–1998, a number of regional central banks adopted inflation targeting. While it is possible for the average inflation rate to be close to target, deviations of inflation could nevertheless be large and protracted. We therefore explore how successful...

The present paper investigates how the global financial crisis has prompted the need to revise monetary policy in general and inflation targeting in particular, with the final purpose of establishing whether the crisis has rendered inflation targeting obsolete or has only strengthened its...

I contemplate the Taylor rule as a benchmark for setting monetary policy in some Accession Countries to the EU in the 1998-2003 period. I find that countries with a floating exchange rate regime (the Czech Republic, Poland and Hungary) moved short-term interest rates as suggested by the Taylor...

In this paper, we study the inflation dynamics in four industrial inflation-targeting (IT) countries. Our objective is to check whether this monetary policy had a stabilization effect on inflation rate for four industrials countries. We propose in this paper a new empirical methodology by using...

This paper that has been presented at the 2nd international conference: "Développements récents en économie financière", evaluates the effect of central bank transparency on the level and variability of realized and expected economic performance. Our findings are consistent with the fact...

This study shows that the private sector accurately predicts short-term interest rate targets set by the Brazilian monetary authorities. With increased transparency under inflation targeting, such evidence suggests that the public perceives the central bank as credible.