International co-movements in inflation and interest rates have been separately documented by numerous empirical studies. In this study, we bridge the gap by investigating common natures that simultaneously generate these international co-movements. To this end, we estimate a high-dimensional...

International co-movements in inflation and interest rates have beenseparately documented by numerous empirical studies. In this study,we bridge the gap by investigating common natures that simultaneouslygenerate these international co-movements. To this end, we estimatea high-dimensional...

A neutral interest rate is a key indicator of the monetary policy stance. This study estimates South Korea’s neutral interest rates and their determinants. Based on the results, we investigate the prior monetary policy patterns of the Bank of Korea (BOK) and evaluate its stance. We adopted a...

We evaluate and compare alternative monetary policy rules, namely average inflation targeting, price level targeting, and traditional inflation targeting rules, in a standard New Keynesian model that features recurring, transient zero lower bound regimes. We use determinacy and expectational...

Would raising the inflation target require an increase in the nominal interest rate in the short run?We answer this policy question, first analytically in a small-scale New Keynesian model with backward-looking components where a closed-form solution exists, and then in a medium-scale model of...

Does raising an inflation target require increasing the nominal interest rate in the short run? We answer this question using a standard New Keynesian model with rich backward-looking elements. We first analytically show that the short-run comovement between inflation and the nominal interest...

We evaluate and compare alternative monetary policy rules, namely average inflation targeting, price level targeting, and traditional inflation targeting rules, in a standard New Keynesian model that features recurring, transient zero lower bound regimes. We use determinacy and expectational...