Title Monetary policy rules for financially vulnerable economies / Eduardo Morón and Diego Winkelried

Published [Washington, D.C.] : International Monetary Fund, ©2003

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Description 1 online resource (35 pages) : illustrations Series IMF working paper ; WP/03/39 IMF working paper ; WP/03/39. Summary One distinguishable characteristic of emerging market economies is that they are not financially robust. These economies are incapable of smoothing out large external shocks, as sudden capital outflows imply large and abrupt swings in the real exchange rate. Using a small open-economy model, this paper examines alternative monetary policy rules for economies with different degrees of liability dollarization. The paper answers the question of how efficient it is to use inflation targeting under high liability dollarization. Our findings suggest that it might be optimal to follow a nonlinear policy rule that defends the real exchange rate in a financially vulnerable economy Bibliography Includes bibliographical references (pages 31-35) Notes Master and use copy. Digital master created according to Benchmark for Faithful Digital Reproductions of Monographs and Serials, Version 1. Digital Library Federation, December 2002. http://purl.oclc.org/DLF/benchrepro0212 MiAaHDL English digitized 2010 HathiTrust Digital Library committed to preserve pda MiAaHDL Print version record Subject Monetary policy -- Latin America -- Econometric models Anti-inflationary policies -- Latin America -- Econometric models Foreign exchange rates -- Latin America -- Econometric models Inflation (Finance) -- Latin America -- Econometric models Dollar, American -- Econometric models Anti-inflationary policies -- Econometric models Dollar, American -- Econometric models Foreign exchange rates -- Econometric models Inflation (Finance) -- Econometric models Monetary policy -- Econometric models Latin America Form Electronic book Author Winkelried, Diego, author. International Monetary Fund. Research Department. ISBN 1451893191 9781451893199 1281608203 9781281608208 1462352065 9781462352067 1452788634 9781452788630 9786613788696 6613788694

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