IDEAS home Printed from https://ideas.repec.org/h/elg/eechap/16504_11.html
   My bibliography  Save this book chapter

The forward-looking model: the open economy

In: Optimal Monetary Policy under Uncertainty, Second Edition

Author

Listed:
  • .

Abstract

Chapter 11 begins by extending the canonical closed-economy New Keynesian model to an open economy setting. This model serves as a framework within which we examine whether there are any signiï¬ cant differences in the conduct of monetary policy in a small open economy compared to a closed economy. The organization of the first part of this chapter is in parts similar to that of Chapter 9 and analyzes the design of optimal policy as well as instrument rules. A more elaborate forward-looking model with micro-founded underpinnings features in the remaining sections. The emphasis in the latter part of this chapter is on evaluating the performance of flexible inflation targeting strategies in a small open economy. We examine CPI, domestic, and real-exchange-rate-adjusted (REX) inflation targeting strategies under optimal monetary policy and variants of Taylor rules.

Suggested Citation

  • ., 2019. "The forward-looking model: the open economy," Chapters, in: Optimal Monetary Policy under Uncertainty, Second Edition, chapter 11, pages 229-269, Edward Elgar Publishing.
    • Handle: RePEc:elg:eechap:16504_11
    as

    Download full text from publisher

    File URL: https://www.elgaronline.com/view/9781784717186/chapter11.xhtml
    Download Restriction: no
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Lim, Guanie & Li, Chen & Adi Syailendra, Emirza, 2021. "Why is it so hard to push Chinese railway projects in Southeast Asia? The role of domestic politics in Malaysia and Indonesia," World Development, Elsevier, vol. 138(C).

    More about this item

    Keywords

    Economics and Finance;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:elg:eechap:16504_11. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Darrel McCalla (email available below). General contact details of provider: http://www.e-elgar.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.