A Model for Full-Fledged Inflation Targeting and Application to Ghana /

A model in which monetary policy pursues full-fledged inflation targeting adapts well to Ghana. Model features include: endogenous policy credibility; non-linearities in the inflation process; and a policy loss function that aims to minimize the variability of output and the interest rate, as well a...

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Detalles Bibliográficos
Autor principal: Clinton, Kevin
Otros Autores: Dagher, Jihad, Kamenik, Ondrej, Laxton, Douglas
Formato: Revista
Lenguaje:English
Publicado: Washington, D.C. : International Monetary Fund, 2010.
Colección:IMF Working Papers; Working Paper ; No. 2010/025
Acceso en línea:Full text available on IMF
Descripción
Sumario:A model in which monetary policy pursues full-fledged inflation targeting adapts well to Ghana. Model features include: endogenous policy credibility; non-linearities in the inflation process; and a policy loss function that aims to minimize the variability of output and the interest rate, as well as deviations of inflation from the long-term low-inflation target. The optimal approach from initial high inflation to the ultimate target is gradual; and transitional inflation-reduction objectives are flexible. Over time, as policy earns credibility, expectations of inflation converge towards the long-run target, the output-inflation variability tradeoff improves, and optimal policy responses to shocks moderate.
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Descripción Física:1 online resource (30 pages)
Formato:Mode of access: Internet
ISSN:1018-5941
Acceso:Electronic access restricted to authorized BRAC University faculty, staff and students