Inflation targeting when devaluations are contractionary

In the New Consensus model, when monetary policy is sufficiently sensitive to changes in the rate of inflation, a standard Taylor rule can effectively pin down inflationary expectations and stabilize the economy at practically no output cost. It is often believed that assuming an open or a closed ec...

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Autor principal: Libman, Emiliano
Formato: Artículo
Lenguaje:en_US
Publicado: 2019
Materias:
INTEGRACION ECONOMICA
DEVALUACION
POLITICA MONETARIA
Acceso en línea:http://repositorio.cedes.org/handle/123456789/4495
https://doi.org/10.4337/roke.2018.02.02
Aporte de:
Respositorio Digital CRIS del CEDES - Centro de Estudios de Estado y Sociedad de Centro de Estudios de Estado y Sociedad (CEDES)
id I61-R167123456789-4495
record_format dspace
institution Centro de Estudios de Estado y Sociedad (CEDES)
institution_str I-61
repository_str R-167
collection Respositorio Digital CRIS del CEDES - Centro de Estudios de Estado y Sociedad
language en_US
orig_language_str_mv en_US
topic INTEGRACION ECONOMICA
DEVALUACION
POLITICA MONETARIA
spellingShingle INTEGRACION ECONOMICA
DEVALUACION
POLITICA MONETARIA
Libman, Emiliano
Inflation targeting when devaluations are contractionary
topic_facet INTEGRACION ECONOMICA
DEVALUACION
POLITICA MONETARIA
description In the New Consensus model, when monetary policy is sufficiently sensitive to changes in the rate of inflation, a standard Taylor rule can effectively pin down inflationary expectations and stabilize the economy at practically no output cost. It is often believed that assuming an open or a closed economy does not matter. This view is incorrect, and the result depends critically on the nature of devaluations. When devaluations are contractionary, standard Taylor rules do not work. This result holds in a standard New Consensus model and in an amended version of it. We suggest that a successful inflation-targeting regime for an open economy cannot rely only on the manipulation of a short-term interest rate.
format Artículo
author Libman, Emiliano
author_facet Libman, Emiliano
author_sort Libman, Emiliano
title Inflation targeting when devaluations are contractionary
title_short Inflation targeting when devaluations are contractionary
title_full Inflation targeting when devaluations are contractionary
title_fullStr Inflation targeting when devaluations are contractionary
title_full_unstemmed Inflation targeting when devaluations are contractionary
title_sort inflation targeting when devaluations are contractionary
publishDate 2019
url http://repositorio.cedes.org/handle/123456789/4495
https://doi.org/10.4337/roke.2018.02.02
work_keys_str_mv AT libmanemiliano inflationtargetingwhendevaluationsarecontractionary
bdutipo_str Repositorios
_version_ 1764820545200717826

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