The study investigates whether a switch from exchange-rate targeting to inflation targeting will facilitate a more appropriate monetary policy and a more stable macroeconomic environment in developing economies. The research finds that the exchange-rate regime is not significant in explaining growth. The empirical evidence on its effect on output volatility suggests that a terms-of-trade shock larger than seven percentage points under a fixed exchange-rate regime will give higher output volatility compared to a float. Given these findings, the study suggests the exchange rate be made flexible and that the direct targeting of inflation is a rational choice in the aftermath of peg exit. To investigate whether monetary-policy responses change under such a regime switching, allowing for the possibility of an endogenous switch, the study estimates augmented Taylor rule with two approaches: a panel switching regression; and a Markov-switching VAR. Results from both suggest that inflation targeting represented a real switch in developing economies.
| Autorius: | Marjan Petreski |
| Leidėjas: | LAP LAMBERT Academic Publishing |
| Išleidimo metai: | 2011 |
| Knygos puslapių skaičius: | 300 |
| ISBN-10: | 3845401540 |
| ISBN-13: | 9783845401546 |
| Formatas: | 220 x 150 x 18 mm. Knyga minkštu viršeliu |
| Kalba: | Anglų |
Parašykite atsiliepimą apie „Monetary-regime switch from exchange-rate to inflation targeting: - with reference to developing economies -“
