Monetary policy rules for financially vulnerable economies

• 成果类型: Article
• 署名作者: Morón, E; Winkelried, D
• 署名单位: Universidad del Pacifico Peru
• 刊物名称: JOURNAL OF DEVELOPMENT ECONOMICS
• ISSN/ISSBN: 0304-3878
• DOI: 10.1016/j.jdeveco.2004.08.001
• 发表日期: 2005
• 页码: 23-51
• 关键词: Liability dollarization; inflation targeting; Monetary policy rules; Latin America

摘要

One distinguishable characteristic of emerging market economies is that they are not financially robust. These economics are incapable of smoothing out large external shocks, as sudden capital outflows imply abrupt swings in the real exchange rate. Using a small open-economy model, this paper examines alternative monetary policy rules for economies with different degrees of liability dollarization. The paper answers the question of how efficient it is to use inflation targeting (IT) under high liability dollarization. Our findings suggest that it might be optimal to follow a nonlinear policy rule that defends the real exchange rate in a financially vulnerable economy. (C) 2004 Elsevier B.V. All rights reserved.