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Calvo-type rules and the forward-looking behavior of inflation targeting central banks

Author

Listed:
  • Eurilton Araújo

    (Central Bank of Brazil and FUCAPE Business School)

  • Débora Gouveia

    (Insper Institute of Education and Research)

Abstract

We estimate small open economy models in which inflation targeting central banks respond to a discounted infinite sum of expected inflation and output gaps (Calvo-type rules). The results support Calvo-type rules for Australia and Canada, and suggest longer targeting horizons for inflation compared with output gaps.

Suggested Citation

  • Eurilton Araújo & Débora Gouveia, 2013. "Calvo-type rules and the forward-looking behavior of inflation targeting central banks," Economics Bulletin, AccessEcon, vol. 33(3), pages 2042-2051.
    • Handle: RePEc:ebl:ecbull:eb-13-00474
    as

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    References listed on IDEAS

    as
    1. Gabriel, Vasco J. & Levine, Paul & Spencer, Christopher, 2009. "How forward-looking is the Fed? Direct estimates from a 'Calvo-type' rule," Economics Letters, Elsevier, vol. 104(2), pages 92-95, August.
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    More about this item

    Keywords

    Calvo-type rules; Bayesian estimation; inflation targeting;
    All these keywords.

    JEL classification:

    • E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit
    • C0 - Mathematical and Quantitative Methods - - General

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