Balance of payments crises under inflation targeting /

Saved in:

Bibliographic Details
Author / Creator:	Kumhof, Michael, author.
Imprint:	[Washington, D.C.] : International Monetary Fund, Research Dept., 2007.
Description:	1 online resource (26 pages) : illustrations
Language:	English
Series:	IMF working paper ; WP/07/084 IMF working paper ; WP/07/084.
Subject:	International Monetary Fund. International Monetary Fund. Balance of payments -- Forecasting. Foreign exchange. Inflation (Finance) -- Forecasting. Balance of payments -- Forecasting. Foreign exchange. Inflation (Finance) -- Forecasting.
Format:	E-Resource Book
URL for this record:	http://pi.lib.uchicago.edu/1001/cat/bib/12499710

Hidden Bibliographic Details
Other authors / contributors:	Li, Shujing, author. Yan, Isabel K., author. International Monetary Fund. Research Department.
ISBN:	128351172X 9781283511728
Notes:	Includes bibliographical references. Restrictions unspecified Electronic reproduction. [Place of publication not identified] : HathiTrust Digital Library, 2010. Master and use copy. Digital master created according to Benchmark for Faithful Digital Reproductions of Monographs and Serials, Version 1. Digital Library Federation, December 2002. http://purl.oclc.org/DLF/benchrepro0212 digitized 2010 HathiTrust Digital Library committed to preserve Print version record.
Summary:	This paper analyzes a small open economy model under inflation targeting. It shows why such a monetary regime is vulnerable to speculative attacks that take place over a short period rather than instantaneously. The speed at which the regime collapses, and the extent of reserve losses, are increasing in the central bank's explicit or implicit commitment to intervene in the foreign exchange market. Attacks are therefore ranked, from most to least severe, as follows: Exchange rate targeting, CPI inflation targeting, domestic nontradables inflation targeting, and money targeting. Under inflation targeting the size of the attack is increasing in the tradables consumption share.
Other form:	Print version: Kumhof, Michael. Balance of payments crises under inflation targeting. [Washington, D.C.] : International Monetary Fund, Research Dept., 2007

Table of Contents:

I. Introduction; II. TheModel; A. Households; B. Firms; C. Government; D. Equilibrium; E. Unsustainable Policy; III. Model Solution; A. Parameter Values; B. SolutionMethod; IV. The Dynamics of Speculative Attacks; A. Model Dynamics; Figures; 1. (a) Overview (Full Accommodation); 1. (b) LaborMarket (Full Accommodation); 1. (c) Price Levels and Inflation Rates (Full Accommodation); 1. (d) Government Budget (Full Accommodation); Tables; 1. Reserve Loss Ratios
Central Bank Accommodates Money Demand at t=0; 2. Reserve Loss Ratios
Central Bank Ensures Smooth Target Paths at t=0.
2. Overview (Smooth Target Paths)B. Two Examples
Chile 1998 and Brazil 2001/2; V. Conclusion; 3. Chile 1997
1999; 4. Brazil 2001
2003; References.

Similar Items