Monetary Rules for Small, Open, Emerging Economies
Author | : Douglas Laxton |
Publisher | : |
Total Pages | : 74 |
Release | : 2003 |
ISBN-10 | : UCSD:31822030995914 |
ISBN-13 | : |
Rating | : 4/5 (14 Downloads) |
Download or read book Monetary Rules for Small, Open, Emerging Economies written by Douglas Laxton and published by . This book was released on 2003 with total page 74 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper develops a variant of the IMF's Global Economic Model (GEM) suitable to analyze macroeconomic dynamics in open economies, and uses it to assess the effectiveness of Taylor rules and Inflation-Forecast-Based (IFB) rules in stabilizing variability in output and inflation. Our findings suggest that a simple IFB rule that does not rely upon any direct estimates of the equilibrium real interest rate and places a relatively high weight on the inflation forecast may perform better in small open economies than conventional Taylor rules.