Inflation Targeting Arrangements in Asia: Exploring the Role of the Exchange Rate
AbstractSince the Asian crisis it has been recognized that exchange rate and monetary policy strategies must involve a “fairly high” element of flexibility rather than a single-minded defense of a particular rate. One way this flexibility might be introduced is by a country adopting an open economy inflation targeting arrangement. This particular policy regime has been officially implemented in several Asian countries in recent years, but the normative implications of inflation targeting appear at times to be at odds with the requirements regarding exchange rate flexibility. This paper presents an analysis of some of the issues relevant to Asian central banks implementing an inflation targeting arrangement with specific focus on the role of the exchange rate.
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.
Bibliographic InfoPaper provided by National University of Singapore, Department of Economics, SCAPE in its series SCAPE Policy Research Working Paper Series with number 0603.
Length: 20 pages
Date of creation: Jan 2006
Date of revision:
Asia; exchange rate regime; inflation targeting arrangement; fear of floating; monetary policy rule; pass through;
Other versions of this item:
- Tony Cavoli & Ramkishen S. Rajan, 2006. "Inflation Targeting Arrangements In Asia : Exploring The Role Of The Exchange Rate," Macroeconomics Working Papers 22564, East Asian Bureau of Economic Research.
- E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
- E50 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - General
- G01 - Financial Economics - - General - - - Financial Crises
This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-01-29 (All new papers)
- NEP-CBA-2006-01-29 (Central Banking)
- NEP-IFN-2006-01-29 (International Finance)
- NEP-MAC-2006-01-29 (Macroeconomics)
- NEP-MON-2006-01-29 (Monetary Economics)
- NEP-SEA-2006-01-29 (South East Asia)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Stanley Fischer, 2001. "Exchange Rate Regimes: Is the Bipolar View Correct?," Journal of Economic Perspectives, American Economic Association, vol. 15(2), pages 3-24, Spring.
- Silvia Sgherri, 2005.
"Explicit and Implicit Targets in Open Economies,"
IMF Working Papers
05/176, International Monetary Fund.
- Tony Cavoli & Ramkishen S. Rajan, 2005.
"Have Exchange Rate Regimes in Asia become More Flexible Post crisis? Re-VISITING the EVIDENCE,"
Finance Working Papers
22563, East Asian Bureau of Economic Research.
- Tony Cavoli & Ramkishen Rajan, 2005. "Have Exchange Rate Regimes in Asia Become More Flexible Post Crisis? Re-visiting the Evidence," Centre for International Economic Studies Working Papers 2005-03, University of Adelaide, Centre for International Economic Studies.
- Tony Cavoli & Ramkishen S. Rajan, 2005. "Have Exchange Rate Regimes in Asia become More Flexible Post crisis? Re- Visiting the Evidence," SCAPE Policy Research Working Paper Series 0519, National University of Singapore, Department of Economics, SCAPE.
- Tony Cavoli & Ramkishen S. Rajan, 2005. "Have Exchange Rate Regimes in Asia Become More Flexible Post Crisis? Re-visiting the Evidence," School of Economics Working Papers 2005-06, University of Adelaide, School of Economics.
- Graham Bird & Ramkishen Rajan, 2002. "Optimal currency baskets and the third currency phenomenon: exchange rate policy in Southeast Asia," Journal of International Development, John Wiley & Sons, Ltd., vol. 14(8), pages 1053-1073.
- Mario I. Blejer & Alfredo M. Leone & Pau Rabanal & Gerd Schwartz, 2002.
"Inflation Targeting in the Context of IMF-Supported Adjustment Programs,"
IMF Staff Papers,
Palgrave Macmillan, vol. 49(3), pages 2.
- Mario Blejer & Alfredo Leone & Pau Rabanal & Gerd Schwartz, 2002. "Inflation Targeting in the Context of IMF-Supported Adjustment Programs," Central Banking, Analysis, and Economic Policies Book Series, in: Norman Loayza & Raimundo Soto & Norman Loayza (Series Editor) & Klaus Schmidt-Hebbel (Series Editor) (ed.), Inflation Targeting: Desing, Performance, Challenges, edition 1, volume 5, chapter 10, pages 439-464 Central Bank of Chile.
- Mario I. Blejer & Alfredo M. Leone & Pau Rabanal & Gerd Schwartz, 2001. "Inflation Targeting in the Context of IMF-Supported Adjustment Programs," Working Papers Central Bank of Chile 116, Central Bank of Chile.
- Gerd Schwartz & Pau Rabanal & Mario I. BlÃ©jer & Alfredo Mario Leone, 2001. "Inflation Targeting in the Context of IMF-Supported Adjustment Programs," IMF Working Papers 01/31, International Monetary Fund.
- Stephen G. Cecchetti & Hans Genberg & Sushil Wadhwani, 2002. "Asset Prices in a Flexible Inflation Targeting Framework," NBER Working Papers 8970, National Bureau of Economic Research, Inc.
- Thomas D. Willett, 2002. "Fear of Floating Needn't Imply Fixed Rates: Feasible Options for Intermediate Exchange Rate Regimes," Claremont Colleges Working Papers 2002-18, Claremont Colleges.
- Ramkishen S. Rajan & Reza Siregar, 2002. "Choice of Exchange Rate Regime: Currency Board (Hong Kong) or Monitoring Band (Singapore)?," Australian Economic Papers, Wiley Blackwell, vol. 41(4), pages 538-556, December.
- Ramikishen Rajan, 2002. "Exchange Rate Policy Options for Post-crisis Southeast Asia: Is There a Case for Currency Baskets?," The World Economy, Wiley Blackwell, vol. 25(1), pages 137-163, 01.
- Kisswani, Khalid/ M. & Nusair, Salah/ A., 2011. "Non-linear convergence in Asian interest rates and inflation rates," MPRA Paper 34179, University Library of Munich, Germany.
- Kisswani, Khalid M. & Nusair, Salah A., 2013.
"Non-linearities in the dynamics of oil prices,"
Elsevier, vol. 36(C), pages 341-353.
- Pourroy, Marc, 2012. "Does exchange rate control improve inflation targeting in emerging economies?," Economics Letters, Elsevier, vol. 116(3), pages 448-450.
- Cavoli, Tony, 2010. "What Drives Monetary Policy in Post-Crisis East Asia? Interest Rate or Exchange Rate Monetary Policy Rules," Journal of Asian Economics, Elsevier, vol. 21(5), pages 456-465, October.
- Chayawadee Chai-anant & Runchana Pongsaparn & Kessarin Tansuwanarat, 2008. "Roles of Exchange Rate in Monetary Policy under Inflation Targeting: A Case Study for Thailand," Working Papers 2008-03, Economic Research Department, Bank of Thailand.
- Ghosh, Amit & Rajan, Ramkishen S., 2009. "Exchange rate pass-through in Korea and Thailand: Trends and determinants," Japan and the World Economy, Elsevier, vol. 21(1), pages 55-70, January.
If references are entirely missing, you can add them using this form.