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Estimating a Monetary Policy Reaction Function for the Dominican Republic

  • José R. Sánchez-Fung

    ()

This paper specifies and estimates a hybrid monetary policy base reaction function for the Dominican Republic (DR). The estimated reactions suggest that the Central Bank has been biased towards targeting the gap between the parallel and official exchange rates, apparently doing so in a more systematic fashion after the mid 1980s. Remarkably, these findings are in line with the Central Bank's long-standing endorsement of a multiple exchange rate regime, and could imply a process of learning, given the monetary authorities' preferences.

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File URL: ftp://ftp.ukc.ac.uk/pub/ejr/RePEc/ukc/ukcedp/0201.pdf
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Paper provided by School of Economics, University of Kent in its series Studies in Economics with number 0201.

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Date of creation: Feb 2002
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Handle: RePEc:ukc:ukcedp:0201
Contact details of provider: Postal: School of Economics, University of Kent, Canterbury, Kent, CT2 7NP
Phone: +44 (0)1227 827497
Web page: http://www.kent.ac.uk/economics/

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