United Kingdom Inflation Targeting and the Exchange Rate
AbstractThe UK's monetary policy strategy is one of floating exchange rates and inflation forecast targeting, with the targeted measure referring to consumer prices. We consider whether it is welfare-reducing to target inflation in the CPI rather than in a narrower index and the role of the exchange rate in the transmission of monetary policy actions to CPI inflation. It is appropriate to model imports as intermediate goods rather than goods consumed directly by households. This leads to a simpler transmission mechanism of monetary policy while also offering a sustainable explanation of the weakness of the exchange rate/inflation relationship and making consumer price inflation an appropriate monetary policy target. Copyright 2006 Royal Economic Society.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by Royal Economic Society in its journal The Economic Journal.
Volume (Year): 116 (2006)
Issue (Month): 512 (06)
Contact details of provider:
Postal: Office of the Secretary-General, School of Economics and Finance, University of St. Andrews, St. Andrews, Fife, KY16 9AL, UK
Phone: +44 1334 462479
Web page: http://www.res.org.uk/
More information through EDIRC
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Li, Xiao-Ming, 2011. "How do exchange rates co-move? A study on the currencies of five inflation-targeting countries," Journal of Banking & Finance, Elsevier, vol. 35(2), pages 418-429, February.
- Fan, Jingwen & Minford, Patrick, 2009.
"Can the Fiscal Theory of the price level explain UK inflation in the 1970s?,"
Cardiff Economics Working Papers
E2009/26, Cardiff University, Cardiff Business School, Economics Section, revised Mar 2011.
- Fan, Jingwen & Minford, Patrick, 2010. "Can the Fiscal Theory of the price level explain UK inflation in the 1970s?," CEPR Discussion Papers 7630, C.E.P.R. Discussion Papers.
- Riccardo DiCecio & Edward Nelson, 2010.
"Euro Membership as a U.K. Monetary Policy Option: Results from a Structural Model,"
in: Europe and the Euro, pages 415-439
National Bureau of Economic Research, Inc.
- Riccardo DiCecio & Edward Nelson, 2009. "Euro membership as a U.K. monetary policy option: results from a structural model," Working Papers 2009-012, Federal Reserve Bank of St. Louis.
- Riccardo DiCecio & Edward Nelson, 2009. "Euro Membership as a U.K. Monetary Policy Option: Results from a Structural Model," NBER Working Papers 14894, National Bureau of Economic Research, Inc.
- Lavan Mahadeva & Juan Carlos parra, 2008.
"Testing a DSGE model and its partner database,"
BORRADORES DE ECONOMIA
004507, BANCO DE LA REPÚBLICA.
- Hatipoglu, Ozan & Alper, C. Emre, 2007. "Estimating Central Bank Behavior in Emerging Markets: The Case of Turkey," MPRA Paper 7107, University Library of Munich, Germany, revised Jan 2008.
- Maritta Paloviita, 2009. "On the Generality of the New Keynesian Phillips Curves," Ensayos Económicos, Central Bank of Argentina, Economic Research Department, vol. 1(55), pages 7-32, July - Se.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing) or (Christopher F. Baum).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.