Inflation Targeting in Financially Stable Economies: Has it Been Flexible Enough?
In: Monetary Policy under Financial Turbulence
The financial crisis and recession of 2008-2009 required significant policy responses by central banks. For formal inflation targeters (IT), a natural question arises about whether IT frameworks were flexible enough to address this unprecedented policy environment. We address this question by assessing the policy responses to the crisis of nine IT central banks that did not face systemic problems in their financial systems. We document substantial deviations of actual policy responses from prescriptions of conventional monetary policy reaction functions, a fact which we more easily reconcile with a decline in the persistence of monetary policy. We also provide evidence on the overall impact of non-monetarypolicy measures on the exchange rate and money market.
(This abstract was borrowed from another version of this item.)
|This chapter was published in: Luis Felipe Céspedes & Roberto Chang & Diego Saravia (ed.) Monetary Policy under Financial Turbulence, , chapter 01, pages 283-368, 2011.|
|This item is provided by Central Bank of Chile in its series Central Banking, Analysis, and Economic Policies Book Series with number v16c09pp283-368.|
|Contact details of provider:|| Postal: |
Phone: (562) 670 2000
Fax: (562) 698 4847
Web page: http://www.bcentral.cl/
More information through EDIRC
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.:
- International Monetary Fund, 2009. "How to Stop a Herd of Running Bears? Market Response to Policy Initiatives during the Global Financial Crisis," IMF Working Papers 09/204, International Monetary Fund.
- Jens H. E. Christensen & Jose A. Lopez & Glenn D. Rudebusch, 2014.
"Do Central Bank Liquidity Facilities Affect Interbank Lending Rates?,"
Journal of Business & Economic Statistics,
Taylor & Francis Journals, vol. 32(1), pages 136-151, January.
- Jens H. E. Christensen & Jose A. Lopez & Glenn D. Rudebusch, 2009. "Do central bank liquidity facilities affect interbank lending rates?," Working Paper Series 2009-13, Federal Reserve Bank of San Francisco.
- Carl Walsh, 2001.
"Speed Limit Policies: The Output Gap and Optimal Monetary Policy,"
CESifo Working Paper Series
609, CESifo Group Munich.
- Carl Walsh, 2003. "Speed Limit Policies: The Output Gap and Optimal Monetary Policy," American Economic Review, American Economic Association, vol. 93(1), pages 265-278, March.
- Taylor, John B., 1993. "Discretion versus policy rules in practice," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 39(1), pages 195-214, December.
- Brian Sack & Volker Wieland, 1999.
"Interest-rate smoothing and optimal monetary policy: a review of recent empirical evidence,"
Finance and Economics Discussion Series
1999-39, Board of Governors of the Federal Reserve System (U.S.).
- Sack, Brian & Wieland, Volker, 2000. "Interest-rate smoothing and optimal monetary policy: a review of recent empirical evidence," Journal of Economics and Business, Elsevier, vol. 52(1-2), pages 205-228.
- Moura, Marcelo L. & de Carvalho, Alexandre, 2010.
"What can Taylor rules say about monetary policy in Latin America?,"
Journal of Macroeconomics,
Elsevier, vol. 32(1), pages 392-404, March.
- Carvalho, Alexandre & Moura, Marcelo L., 2008. "What Can Taylor Rules Say About Monetary Policy in Latin America?," Insper Working Papers wpe_126, Insper Working Paper, Insper Instituto de Ensino e Pesquisa.
- Cho-Hoi Hui & Hans Genberg & Tsz-Kin Chung, 2009.
"Funding Liquidity Risk and Deviations from Interest-Rate Parity During the Financial Crisis of 2007-2009,"
0913, Hong Kong Monetary Authority.
- Cho‐Hoi Hui & Hans Genberg & Tsz‐Kin Chung, 2011. "Funding liquidity risk and deviations from interest‐rate parity during the financial crisis of 2007–2009," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 16(4), pages 307-323, October.
- Erhan Artuç & Selva Demiralp, 2009.
"Provision of Liquidity through the Primary Credit Facility during the Financial Crisis: A Structural Analysis,"
Koç University-TUSIAD Economic Research Forum Working Papers
0912, Koc University-TUSIAD Economic Research Forum.
- Erhan Artuç & Selva Demiralp, 2010. "Provision of liquidity through the primary credit facility during the financial crisis: a structural analysis," Economic Policy Review, Federal Reserve Bank of New York, issue Aug, pages 43-53.
- Selva Demiralp & Erhan Artuc, 2009. "Provision of Liquidity through the Primary Credit Facility during the Financial Crisis: A Structural Analysis," 2009 Meeting Papers 215, Society for Economic Dynamics.
- Aït-Sahalia, Yacine & Andritzky, Jochen & Jobst, Andreas & Nowak, Sylwia & Tamirisa, Natalia, 2012.
"Market response to policy initiatives during the global financial crisis,"
Journal of International Economics,
Elsevier, vol. 87(1), pages 162-177.
- Yacine Aït-Sahalia & Jochen Andritzky & Andreas Jobst & Sylwia Nowak & Natalia Tamirisa, 2010. "Market Response to Policy Initiatives during the Global Financial Crisis," NBER Working Papers 15809, National Bureau of Economic Research, Inc.
- Mark R. Stone & Etienne B. Yehoue & Kotaro Ishi, 2009. "Unconventional Central Bank Measures for Emerging Economies," IMF Working Papers 09/226, International Monetary Fund.
- repec:clu:wpaper:0910-01 is not listed on IDEAS
- Alejandro Jara & Ramon Moreno & Camilo E Tovar, 2009. "The global crisis and Latin America: financial impact and policy responses," BIS Quarterly Review, Bank for International Settlements, June.
- Ian Nield, 2008. "Evolution of the Reserve Bank’s liquidity facilities," Reserve Bank of New Zealand Bulletin, Reserve Bank of New Zealand, vol. 71, December.
- John P. Judd & Glenn D. Rudebusch, 1998. "Taylor's rule and the Fed, 1970-1997," Economic Review, Federal Reserve Bank of San Francisco, pages 3-16.
- Alan Bollard & Tim Ng, 2009. "Coping with global financial and economic stresses," Reserve Bank of New Zealand Bulletin, Reserve Bank of New Zealand, vol. 72, pages 34-45, March.
- James McAndrews & Asani Sarkar & Zhenyu Wang, 2008. "The effect of the Term Auction Facility on the London Inter-Bank Offered Rate," Staff Reports 335, Federal Reserve Bank of New York.
- Richard Clarida & Jordi Gali & Mark Gertler, 2001. "Optimal Monetary Policy in Open versus Closed Economies: An Integrated Approach," American Economic Review, American Economic Association, vol. 91(2), pages 248-252, May.
When requesting a correction, please mention this item's handle: RePEc:chb:bcchsb:v16c09pp283-368. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Claudio Sepulveda)
If references are entirely missing, you can add them using this form.