Monetary policy transmission, interest rate rules and inflation targeting in three transition countries

Monetary Policy and Inflation Targeting

In the 1990s, several countries shifted to a new monetary policy regime: an announced quantitative inflation target. The reason for this shift was the unsatisfactory performance under previous regimes. New Zealand, Canada, Australia, and Spain all introduced inflation targets under persistently high inflation; the United Kingdom, Sweden, and Finland did so after having abandoned fixed exchange ...

Monetary Policy and Inflation Targeting

On 21–22 July 1997, the Bank convened a conference entitled, 'Monetary Policy and Inflation Targeting'. The following excer pt is the introductory chapter of the conference volume. Medium-term price stability is widely accepted as the appropriate ultimate goal for monetary policy. This reflects two ideas. The first is that high rates of inflation distort decision-making, ultimately leading to s...

optimal monetary policy and inflation targeting

in this paper, by using dynamic stochastic general equilibrium, optimal monetary rule derived for central bank of iran. monetary transmission mechanism of the model includes four equations, aggregate demand, aggregate supply, oil price and taylor rule. we have proved that dynamic structure of aggregate demand relation, regarding monetary inflation in iran, is a function of money growth rate. wi...

Global Knowledge, Local Solutions: Interest Rate and Monetary Policy

Interest Rate Rules and the Credit Channel of Monetary Policy Transmission

This paper develops a general equilibrium model with the banking system and the reserves market, where the central bank a¤ects the federal funds rate through open market operations. We show that when the coe¢ cient that measures the response of the federal funds rate to the in‡ation rate falls below a threshold value, which is very small, the economy will have two steady states, where the low-e...