| 来源类型 | Discussion paper |
| 规范类型 | 论文 |
| 来源ID | DP12137 |
| DP12137 The Exchange Rate as an Instrument of Monetary Policy | |
| Ilian Mihov; Jonas Heipertz; Ana Santacreu | |
| 发表日期 | 2017-07-10 |
| 出版年 | 2017 |
| 语种 | 英语 |
| 摘要 | Most of the theoretical research in small open economies has typically focused on corner solutions regarding the exchange rate: either the currency rate is fixed by the central bank or it is left to be freely determined by market forces. We build an open-economy model with external habits in consumption to study the properties of a new class of monetary policy rules, in which the exchange rate serves as the instrument for stabilizing business cycle fluctuations. Instead of using a short-term interest rate, the monetary authority announces a path for currency appreciation or depreciation as a reaction to fluctuations in inflation and the output gap. We find that, under a wide range of modeling assumptions, the exchange rate rule outperforms a standard Taylor rule in terms of stabilizing both output and inflation. The reduction in volatility is more pronounced for more open economies and for economies with lower sensitivity to movements in the interest rate. We show that differences between the two rules are driven by two key factors: (i) paths of the nominal exchange rate and the interest rate under each rule, and (ii) the time variation in the risk premium, which leads to deviations from uncovered interest parity. |
| 主题 | International Macroeconomics and Finance ; Monetary Economics and Fluctuations |
| 关键词 | Monetary policy rules Exchange rate management External habit risk premium |
| URL | https://cepr.org/publications/dp12137 |
| 来源智库 | Centre for Economic Policy Research (United Kingdom) |
| 资源类型 | 智库出版物 |
| 条目标识符 | http://119.78.100.153/handle/2XGU8XDN/540948 |
| 推荐引用方式 GB/T 7714 | Ilian Mihov,Jonas Heipertz,Ana Santacreu. DP12137 The Exchange Rate as an Instrument of Monetary Policy. 2017. |
| 条目包含的文件 | 条目无相关文件。 | |||||
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