In recent decades, the declarations of “independent” central banks and the conduct of monetary policy have been assigned an ever increasing role in the pursuit of economic and financial stability. This is curious since there is, in practice, no body of scientific knowledge (evidence based beliefs) solid enough to have ensured agreement among central banks on the best way to conduct monetary pol...

In many economies, commodity price volatility is one of the sources of signaling to market players. Different experiences of price shocks have led economists to reconsider price shocks. Considering the effects of monetary policy on the inflation rate, the present study investigates the impact of monetary policy shock on the price of storable food commodities. In this regard, data for 2006: 01 t...

Financial Globalization and Monetary Policy* The process of financial globalization has significantly altered the environment in which national monetary policy authorities operate. What implications does this have for the design of monetary policy? The question can be properly addressed only in the context of a model where monetary policy interacts with financial market efficiency. This paper i...

today, the discussion of regularity monetary policy in achieving inflation and output gap stabilization is important. in this paper, we investigated the persistence of the output gap in iran economy and then by using a hybrid new keynesian model based on quarterly data for 1990:1- 2011:3. we compared three alternative instrumental rules in monetary policy for iran economy. the results indicated...

With the development of market-oriented economic reforms, Chinese monetary policy plays an important role in the world. The objective of this paper is to review the recent conduct of Chinese monetary policy and the central bank’s rule-based behavior in period 1994-2006 by estimating the monetary policy rules (monetary policy reaction function). It compares four kinds of monetary policy rules -T...

â  monetary policy rule is an approach to avoid time inconsistency problem as regarded by new classical economist to choose a time plan for policy making in order to maximize households’ well-being. the foundation of time inconsistency problem is not coincidence of expectations as an ex-ante variable, which is expected variable, with actual variable as an ex-post variable. expectations in fin...

the ultimate goal of monetary policy is to achieve price stability and high output. in this regard, central banks usually change the interest rate, liquidity, and money base in order to apply monetary policies. the john b. taylor rule is one of the rules known in the transmission of monetary policy.[1] based on this rule and given the output gap and inflation gap, the central bank increases or ...

Price stability has been the foremost task of monetary policy. The information relating to the response of prices to monetary policy shocks is essential for conducting monetary policy in general and for inflation targeting of central banks in particular. Most of the published empirical studies analyze the response of an aggregate price index like CPI or a consumption deflator and their r...

This paper investigates whether Taylor rule can better guide the monetary policy in developing economies. Existing literatures do not focus on the implementability of rule-based monetary policy in emerging economies. In last two decades a number of industrialised countries have gained success in achieving macroeconomic policy goals by switching to rule-based policy regime from discretionary fra...