Search Results - subject:"Instrument Rule"

Loisel, Olivier - 2022

Persistent link: https://www.econbiz.de/10013472871

Currency Misalignments and Optimal Monetary Policy: A Re-examination

Engel, Charles - Reserve Bank of Australia - 2009

This paper examines optimal monetary policy in an open-economy two-country model with sticky prices. Currency misalignments are shown to be inefficient and lower world welfare. Also, optimal policy must target not only inflation and the output gap, but also the currency misalignment. However,...

Persistent link: https://www.econbiz.de/10005426720

The Timeless Perspective vs. Discretion: Theory and Monetary Policy Implications for an Open Economy

Guender, Alfred - Department of Economics and Finance, College of … - 2011

Compared to the standard Phillips curve, an open-economy version that features a real exchange rate channel leads to a markedly different target rule in a New Keynesian optimizing framework. Under optimal policy from a timeless perspective (TP) the target rule involves additional history...

Persistent link: https://www.econbiz.de/10009019164

CPI Inflation Targeting and the UIP Puzzle: An Appraisal of Instrument and Target Rules

Guender, Alfred - Department of Economics and Finance, College of … - 2011

Employing an optimizing framework, this paper shows that a target rule dominates a simple instrument rule when the … matter how policy parameters are set, the optimal simple instrument rule cannot replicate the superior stabilization results … achieved by the target rule approach. The optimal simple instrument rule also fails to account for the UIP puzzle. In contrast …

Persistent link: https://www.econbiz.de/10009019165