Interest Rate Setting and Inflation Targeting: Evidence of a Nonlinear Taylor Rule for the United Kingdom
نویسندگان
چکیده
منابع مشابه
Targeting Inflation : The United Kingdom in Retrospect
had involuntarily exited from its fixed exchange rate regime and had experienced a sharp currency depreciation as a result. The macroeconomic background was one of high and rising inflation expectations but a contracting real economy. The initial conditions for inflation targeting were not, therefore, particularly propitious. Despite this unfavorable backdrop, the United Kingdom’s experience wi...
متن کاملTaylor Rule: A Model for the Mechanism of Monetary Policy and Inflation Control in the Framework of the Interest-Free Banking Act
The ultimate goal of monetary policy is to achieve price stability and high output. In this regard, central banks usually change the interest rate, liquidity, and money base in order to apply monetary policies. The John B. Taylor rule is one of the rules known in the transmission of monetary policy.[1] Based on this rule and given the output gap and inflation gap, the central bank increases or ...
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Experts believe that by lowering the interest rate on bank accounts, total cost of goods and services decreases, and secondly, investment production increases, both of which lead to lower inflation and provide stable employment field, on the other hand, are concerned about the negative effects of lowering the interest rate without lowering inflation and know the underlying requirement of nomin...
متن کاملtaylor rule: a model for the mechanism of monetary policy and inflation control in the framework of the interest-free banking act
the ultimate goal of monetary policy is to achieve price stability and high output. in this regard, central banks usually change the interest rate, liquidity, and money base in order to apply monetary policies. the john b. taylor rule is one of the rules known in the transmission of monetary policy.[1] based on this rule and given the output gap and inflation gap, the central bank increases or ...
متن کاملPerformance of Inflation Targeting Based On Constant Interest Rate Projections∗
Monetary policy is sometimes formulated in terms of a target level of inflation, a fixed time horizon and a constant interest rate that is anticipated to achieve the target at the specified horizon. These requirements lead to constant interest rate (CIR) instrument rules. Using the standard New Keynesian model, it is shown that some forms of CIR policy lead to both indeterminacy of equilibria a...
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ژورنال
عنوان ژورنال: Studies in Nonlinear Dynamics & Econometrics
سال: 2006
ISSN: 1558-3708
DOI: 10.2202/1558-3708.1359