Monetary policy regimes

A global assessment

Dados Bibliográficos

ID21543829
AutoresHarsha Paranavithana (Business School The University of Western Australia Perth WA Australia), Rod Tyers (0000-0003-3080-0415, Business School The University of Western Australia Perth WA Australia, autor correspondente), Leandro M Magnusson (0000-0003-3691-9214, The University of Western Australia), Leandro Magnusson (Business School The University of Western Australia Perth WA Australia), Florian Schiffmann (0000-0002-1355-8084, Centre of Policy Studies Victoria University Melbourne VIC Australia)
Ano2022
Volume45
Fascículo6
Páginas1737-1772
Data de publicação2022-06-01
Open AccessSim
TipoARTICLE
PeriódicoWorld Economy (JOURNAL)
Identificadores do periódicoISSN: 0378-5920 • E-ISSN: 1467-9701
EditoraWiley (PUBLISHER • GB)
DOI10.1111/twec.13228
OpenAlexW3014796263
IdiomaEN
Referências citadas52

An eight‐region, stochastic, general equilibrium model that incorporates global money and financial markets is used, first, to identify the distributions of regional supply side shocks in 1954–2016 from real GDP data. Second, in Monte Carlo simulations, the model is subjected to random draws from these distributions in all regions simultaneously, under a range of combinations of monetary targets. These experiments begin with a comparison of the volatilities of output and welfare (defined as the purchasing power of disposable income at regional prices) under current de facto and de jure monetary targets. The results show that the de facto targets offer significant improvement. A further analysis of targeting games suggests that a Nash equilibrium on output risk is dominated by nominal GDP targeting, while the corresponding Nash equilibrium on welfare risk has predominant inflation targeting (IT). Notwithstanding IMF policy to convert developing country central banks to inflation targeting, a fallacy of composition is observed in the spread of IT internationally. This spread tends to raise the volatility of welfare in the established open economies

Econometrics · Economics · General equilibrium theory · Inflation targeting · Macroeconomics · Microeconomics · Monetary economics · Monetary policy · Nash equilibrium · Purchasing power · Stochastic volatility · Welfare · Fiscal Policies and Political Economy · Global Financial Crisis and Policies · Monetary Policy and Economic Impact

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