Delegating Optimal Monetary Policy Inertia in a Small-Open Economy-Reference-Cited by-同舟云学术

Delegating Optimal Monetary Policy Inertia in a Small-Open Economy

Published:2020-12-10 Issue:2 Volume:21 Page:473-507
ISSN:1935-1690
Container-title:The B.E. Journal of Macroeconomics
language:en
Short-container-title:

Author:

Ida Daisuke¹,Okano Mitsuhiro²

Affiliation:

1. Faculty of Economics , Momoyama Gakuin University , 1-1, Manabino , Izumi , Osaka 594-1198 , Japan

2. Faculty of Economics , Osaka Gakuin University , 2-36-1 Kishibeminami , Suita , Osaka 564-8511 , Japan

Abstract

Abstract This paper explores the delegation of several targeting regimes in a small open new Keynesian (NK) model and examines how central banks overcome stabilization bias in a small open NK model. Results indicate that both speed limit and real exchange rate targeting can carry the isomorphic properties of optimal monetary policy over to the closed economy. In addition, neither nominal income growth targeting nor CPI inflation targeting replicates a commitment policy. These findings provide new implications for optimal monetary policy in an open economy.

Funder

JSPS KAKENHI

Publisher

Walter de Gruyter GmbH

Subject

Economics and Econometrics

Link

https://www.degruyter.com/document/doi/10.1515/bejm-2020-0181/pdf

Reference35 articles.

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