Download or read book Measuring Monetary Policy in Open Economies written by Fabio C. Bagliano and published by . This book was released on 1999 with total page 50 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Measuring Monetary Policy in Open Economies written by Diego A. Cerdeiro and published by . This book was released on 2010 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Measuring Monetary Policy in Open Economies written by Diego Cerdeiro and published by . This book was released on 2017 with total page 35 pages. Available in PDF, EPUB and Kindle. Book excerpt: The paper extends Bernanke and Mihov's [6] closed-economy strategy for identification of monetary policy shocks to open-economy settings, accounting for the simultaneity between interest-rate and exchange-rate innovations. The methodology allows a separate treatment of two distinct monetary policy shocks, one that operates through open market operations, and another one that takes place through interventions in the foreign exchange market. Implementation of this strategy to the case of Argentina provides the stylized facts necessary to choose among competing theoretical models of this economy. In addition to studying the effects of monetary policy innovations, the present study sheds light on the endogenous component of monetary policy. In this regard, the paper finds that, notwithstanding the relative stability of the exchange rate and the accumulation of large amounts of international reserves, the central bank in Argentina has been far from absorbing balance of payments shocks in a currency-board fashion. The growing level of international reserves can be rationalized, instead, as the monetary authority's response to terms of trade, supply and domestic currency demand shocks.
Download or read book International Dimensions of Monetary Policy written by Jordi Galí and published by University of Chicago Press. This book was released on 2010-03-15 with total page 663 pages. Available in PDF, EPUB and Kindle. Book excerpt: United States monetary policy has traditionally been modeled under the assumption that the domestic economy is immune to international factors and exogenous shocks. Such an assumption is increasingly unrealistic in the age of integrated capital markets, tightened links between national economies, and reduced trading costs. International Dimensions of Monetary Policy brings together fresh research to address the repercussions of the continuing evolution toward globalization for the conduct of monetary policy. In this comprehensive book, the authors examine the real and potential effects of increased openness and exposure to international economic dynamics from a variety of perspectives. Their findings reveal that central banks continue to influence decisively domestic economic outcomes—even inflation—suggesting that international factors may have a limited role in national performance. International Dimensions of Monetary Policy will lead the way in analyzing monetary policy measures in complex economies.
Download or read book The Effectiveness of Monetary Policy in Small Open Economies written by Keyra Primus and published by International Monetary Fund. This book was released on 2016-09-16 with total page 39 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper examines the relative effectiveness of the use of indirect and direct monetary policy instruments in Barbados, Jamaica and Trinidad and Tobago, by estimating a restricted Vector Autoregressive model with Exogenous Variables (VARX). The study assumes that the central bank conducts monetary policy using a Taylor-type rule and it evaluates the effects of a reserve requirement policy. The results show that although a positive shock to the policy interest rate has a direct effect on commercial banks' interest rates, there is a weak transmission to the real variables. Furthermore, an increase in the required reserve ratio is successful in reducing private sector credit and excess reserves, while at the same time alleviating pressures on the exchange rate. The findings therefore indicate that central banks in small open economies should consider using reserve requirements as a complement to interest rate policy, to achieve their macroeconomic objectives.
Download or read book Measuring Monetary Policy in Open Economics written by Fabio-Cesare Bagliano and published by . This book was released on 1999 with total page 36 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Unconventional Monetary Policy in a Small Open Economy written by Margaux MacDonald and published by International Monetary Fund. This book was released on 2017-12-01 with total page 70 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper investigates the effects of unconventional monetary policy in a small open economy. Using recently proposed shadow interest rates to capture unconventional monetary policy at the zero lower bound (ZLB) we estimate a Bayesian structural vector autoregressive model for Canada - a useful case where foreign shocks can be proxied by U.S. variables alone. We find that, during the ZLB period, Canadian unconventional monetary policy increased output (measured by industrial production) by 0.013 percent per month on average while US unconventional monetary policy raised Canadian output by 0.127 percent per month on average. Our results demonstrate the effectiveness of domestic unconventional monetary policy and the strong positive spillover effects that foreign unconventional monetary policies can have in a small open economy.
Download or read book Open Economy Macroeconomics written by Helmut Frisch and published by Springer. This book was released on 2016-07-27 with total page 437 pages. Available in PDF, EPUB and Kindle. Book excerpt: The integration of market economies is one of the most remarkable features of international economics, which has important implications for macroeconomic performance in open economies. Equally important is the declining relevance of the real versus the monetary theory dichotomy. These papers focus on those aspects of monetary policy which relate to credibility and non-neutrality; the domestic adjustment to foreign shocks; the interdependence of open economies and their strategic interactions. An important section is also devoted to the innovative modelling of exchange rate dynamics.
Download or read book The Measurement of Monetary Policy written by M. Ray Perryman and published by Springer Science & Business Media. This book was released on 2012-12-06 with total page 147 pages. Available in PDF, EPUB and Kindle. Book excerpt: The material in this book reflects, in many respects, the culmination of several years of research regarding the measurement of monetary policy. On all the issues addressed in the text, I have thus attempted to provide a perspective of the type that can only be gained from "living with" a topic over an extended time horizon. I have often said that I came to understand the monetary indicators literature only after having written dozens of papers on the subject. This statement may seem a bit trite, but I feel certain that anyone who has waded through this morass (or at least tried to) can fully empathize and recognize the grain of truth therein. It is my sincere hope that the synthesis given in the work will calm the fears and anxieties that often (and understandably) plague beginners in this field. In settling down to the process of "pulling together" this manuscript, I was surprised to find the ease and consistency with which various topics, explored at widely diverse times and in no particular order, meshed into a unified whole. I attempted to write the book in a manner that would simultaneously be generally comprehensible to students (particularly at the graduate level) and to practitioners desiring a relatively thorough overview of the indicators literature and yet be of value to scholars desiring to explore (and hopefully advance) this field.
Download or read book Monetary Policy Rules written by John B. Taylor and published by University of Chicago Press. This book was released on 2007-12-01 with total page 460 pages. Available in PDF, EPUB and Kindle. Book excerpt: This timely volume presents the latest thinking on the monetary policy rules and seeks to determine just what types of rules and policy guidelines function best. A unique cooperative research effort that allowed contributors to evaluate different policy rules using their own specific approaches, this collection presents their striking findings on the potential response of interest rates to an array of variables, including alterations in the rates of inflation, unemployment, and exchange. Monetary Policy Rules illustrates that simple policy rules are more robust and more efficient than complex rules with multiple variables. A state-of-the-art appraisal of the fundamental issues facing the Federal Reserve Board and other central banks, Monetary Policy Rules is essential reading for economic analysts and policymakers alike.
Download or read book Handbook of Monetary Economics written by Benjamin M. Friedman and published by . This book was released on 1990 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book The Transmission of Monetary Policy in Open Economies written by and published by . This book was released on 1994 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Measuring Monetary Policy for a Small Open Economy written by Hakan Berument and published by . This book was released on 2018 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper proposes a measure to assess the monetary policy for a highly inflationary small open economy: Turkey. The empirical evidence suggests that positive innovations in the spread between the Central Bank's interbank interest rate and the depreciation rate of the local currency mimic the properties of the tight monetary policy. These innovations, when they are positive, decrease income and prices, and appreciate the local currency. For prices and the exchange rate, the effects are permanent; but for income the effect is transitory.
Download or read book Measuring Monetary Policy Shocks in a Small Open Economy written by Giorgio Di Giorgio and published by . This book was released on 2001 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: In this paper, we present different specifications of a structural vector autoregressive model (SVAR) that can be used to identify monetary policy operating regimes and monetary policy shocks in a small open economy. SVAR has the advantage of imposing a minimal set of theoretical restrictions on the model to be tested. A monetary policy shock is identified with the residual of an equation regressing a monetary policy instrument on a set of variables that are considered relevant for the decisions of the central bank. We focus on the Italian economy in the 90s and try to establish if monetary policy shocks are better identified using exchange rates or foreign exchange reserves as a conditioning variable for the small open economy framework. In the considered sample, we have two periods of quasi-fixed nominal exchange rates (1989.06 - 1992.09; 1996.11 - 1998.04) and one of free floating (1992.10 - 1996.10). Given the limited span of the subperiods and the monthly frequency of the data, we treat the whole sample as one of managed floating of the Lira and propose different model specifications to check whether the identification of the central bank operating regime and of the monetary policy shocks is robust enough. Our methodology is based on De Arcangelis and Di Giorgio (1998), which in turn extended to a small open economy the research strategy introduced by Strongin (1995) and further developed by Bernanke and Mihov (1998) for the US. More precisely, we give a structural content to the VAR models by linking econometric analysis with the institutional knowledge of how the market for banks reserves (i.e., the market in which monetary policy is actually conducted) works in Italy. In our estimated models, indeed, identification hinges on a detailed description of the operating procedures used by the Bank of Italy. The advantage of this procedure is that it allows for a direct test of different model alternatives that are nested in the same specification, without imposing one identification mechanism a priori. The correct measure of a monetary policy shock is then selected by the data itself. Our analysis confirms the view that the Bank of Italy has been targeting the rate on overnight interbank loans in the 90s. This result is obtained with either proposed modeling choices. Therefore, we interpret shocks to the overnight rate as purely exogenous monetary policy shocks and study how they impact the economy. In the model with the exchange rate, following a monetary policy restriction, output declines and shows a statistically significant reduction for about one year after 7-8 months. Although we have not included a commodity price index we find no evidence of a price puzzle. The model does not either exhibit any liquidity puzzle. The model with foreign reserves provide similar results with a more pronounced output response. Also the inclusion of a German interest rate (whose innovations could be interpreted as a proxy for foreign monetary policy shocks) does not modify the identification results and the qualitative responses of output and inflation.
Download or read book Monetary Policy Transmission in Emerging Markets and Developing Economies written by Mr.Luis Brandao-Marques and published by International Monetary Fund. This book was released on 2020-02-21 with total page 54 pages. Available in PDF, EPUB and Kindle. Book excerpt: Central banks in emerging and developing economies (EMDEs) have been modernizing their monetary policy frameworks, often moving toward inflation targeting (IT). However, questions regarding the strength of monetary policy transmission from interest rates to inflation and output have often stalled progress. We conduct a novel empirical analysis using Jordà’s (2005) approach for 40 EMDEs to shed a light on monetary transmission in these countries. We find that interest rate hikes reduce output growth and inflation, once we explicitly account for the behavior of the exchange rate. Having a modern monetary policy framework—adopting IT and independent and transparent central banks—matters more for monetary transmission than financial development.
Download or read book The Empirics of Monetary Policy Rules in Open Economies written by Richard H. Clarida and published by . This book was released on 2001 with total page 38 pages. Available in PDF, EPUB and Kindle. Book excerpt:
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.
