Inflation targeting in a small open economy: Empirical results for Switzerland

• 成果类型: Article
• 署名作者: Dueker, M; Fischer, AM
• 署名单位: Swiss National Bank (SNB)
• 刊物名称: JOURNAL OF MONETARY ECONOMICS
• ISSN/ISSBN: 0304-3932
• DOI: 10.1016/0304-3932(95)01241-9
• 发表日期: 1996
• 页码: 89-103
• 关键词: Inflation targeting; exchange rate feedback; Markov switching

摘要

This paper extends McCallum's (1987) nominal targeting rule to a small open economy by allowing for feedback from the exchange rate. Instead of setting parameters in a McCallum-type targeting rule and simulating, the parameters are estimated using a Markov switching model. We argue that a model of discrete parameter changes should be adept at capturing sudden changes in policy regime, such as changes in the degree to which monetary policy admits feedback from the exchange rate. We examine the legitimacy of an inflation targeting rule with occasional exchange-rate feedback to describe Swiss monetary policy over the past twenty years.