2000 OpenEconomyInflationTargeting

• (Svensson, 2000) ⇒ Lars E.O. Svensson. (2000). “Open-economy Inflation Targeting.” In: Journal of international economics, 50(1). doi:10.1016/S0022-1996(98)00078-6

Subject Headings: Inflation Targeting; Price Stability

Cited By

• http://scholar.google.com/scholar?q=%22Open-economy+inflation+targeting%22+2000

Quotes

Author Keywords

• Price stability; Transmission mechanism; Inflation targeting

Abstract

The paper examines inflation targeting in a small open economy with forward-looking aggregate supply and demand with microfoundations, and with stylized realistic lags in the different monetary-policy transmission channels. The paper compares strict and flexible targeting of CPI and domestic inflation, and inflation-targeting reaction functions and the Taylor rule. Flexible CPI-inflation targeting does not limit the variability of CPI inflation but also the variability of the output gap and the real exchange rate. Negative productivity supply shocks and positive demand shocks have similar effects on inflation and the output gap, and induce similar monetary policy responses.

References

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	Author	volume	Date Value	title	type	journal	titleUrl	doi	note	year
2000 OpenEconomyInflationTargeting	Lars E.O. Svensson			Open-economy Inflation Targeting				10.1016/S0022-1996(98)00078-6