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Optimal control theory for inflation targeting

Author

Listed:
  • Sergio Da Silva

    (Department of Economics, Federal University of Santa Catarina)

  • Roberto Meurer

    (Department of Economics, Federal University of Santa Catarina)

  • Thiago Veloso

    (National Agency for Electric Energy)

Abstract

We make a case for the usefulness of an optimal control approach for the central banks' choice of interest rates in inflation target regimes. We illustrate it with data from selected developed and emerging countries with longest experience of inflation targeting.

Suggested Citation

  • Sergio Da Silva & Roberto Meurer & Thiago Veloso, 2008. "Optimal control theory for inflation targeting," Economics Bulletin, AccessEcon, vol. 3(24), pages 1-14.
    • Handle: RePEc:ebl:ecbull:eb-08c60001
    as

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    References listed on IDEAS

    as
    1. Hutchison, M M & Walsh, C E, 1998. "The Output-Inflation Tradeoff and Central Bank Reform: Evidence from New Zealand," Economic Journal, Royal Economic Society, vol. 108(448), pages 703-725, May.
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    6. Frederic S. Mishkin, 2004. "Can Inflation Targeting Work in Emerging Market Countries?," NBER Working Papers 10646, National Bureau of Economic Research, Inc.
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    More about this item

    JEL classification:

    • C6 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling
    • E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit

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