Hidden Bibliographic Details
| Other authors / contributors: | Buffie, Edward F., author.
Zanna, Luis-Felipe, (IMFstaff)
International Monetary Fund. Research Department, issuing body.
International Monetary Fund. Strategy, Policy, and Review Department, issuing body.
International Monetary Fund. Institute for Capacity Development, issuing body.
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| ISBN: | 1513567438
9781513567433
9781513567433
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| ISSN: | 1018-5941
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| Notes: | "Research Department, Strategy, Policy, and Review Department, and Institute for Capacity Development."
"March 2016."
Includes bibliographical references (pages 57-64).
Online resource; title from pdf title page (IMF.org Web site, viewed March 14, 2016).
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| Summary: | We analyze coordination of monetary and exchange rate policy in a two-sector model of a small open economy featuring imperfect substitution between domestic and foreign financial assets. Our central finding is that management of the exchange rate greatly enhances the efficacy of inflation targeting. In a flexible exchange rate system, inflation targeting incurs a high risk of indeterminacy where macroeconomic fluctuations can be driven by self-fulfilling expectations. Moreover, small inflation shocks may escalate into much larger increases in inflation ex post. Both problems disappear when the central bank leans heavily against the wind in a managed float.--Abstract.
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| Other form: | Print Version: Airaudo, Marco. Inflation Targeting and Exchange Rate Management In Less Developed Countries. Washington, D.C. : International Monetary Fund, 2016 9781513567433
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| Standard no.: | 10.5089/9781513567433.001
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