The optimal choice of monetary policy instruments in a small open economy

2008 ◽  
Vol 41 (1) ◽  
pp. 105-137 ◽  
Author(s):  
Rajesh Singh ◽  
Chetan Subramanian
Keyword(s):  
Monetary Policy ◽  
Open Economy ◽  
Small Open Economy ◽  
Policy Instruments ◽  
Optimal Choice

WHY JOIN A CURRENCY UNION? A NOTE ON THE IMPACT OF BELIEFS ON THE CHOICE OF MONETARY POLICY

2011 ◽  
Vol 16 (2) ◽  
pp. 320-334 ◽  
Author(s):  
Federico Ravenna
Keyword(s):  
Monetary Policy ◽  
Open Economy ◽  
Policy Maker ◽  
Small Open Economy ◽  
Optimal Choice ◽  
New Keynesian ◽  
Monetary Policies ◽  
Keynesian Model ◽  
The Impact ◽  
Better Than

We argue that a fixed exchange rate can be an optimal choice even if a policy maker could commit to the first-best monetary policy whenever the private sector's beliefs reflect incomplete information about the policy maker's dependability. This model implies that joining a currency area may be optimal for its impact not on the behavior of the policy maker, but on the beliefs of the private sector. Monetary policies are evaluated using a new Keynesian model of a small open economy solved under imperfect policy credibility. We quantify the minimum distance between announced policy and the private sector's beliefs that is necessary for a peg to perform better than an independent monetary policy when the policy maker can commit to the first-best policy.

ASSET PRICES, OUTPUT AND MONETARY POLICY IN A SMALL OPEN ECONOMY

2008 ◽  
Vol 59 (4) ◽  
pp. 666-686 ◽  
Author(s):  
Christopher Malikane ◽  
Willi Semmler
Keyword(s):  
Monetary Policy ◽  
Open Economy ◽  
Asset Prices ◽  
Small Open Economy

Monetary policy announcements and stock price dynamics in a small open economy

2011 ◽  
Vol 20 (4) ◽  
pp. 520-531 ◽  
Author(s):  
Chi-Chur Chao ◽  
Shih-Wen Hu ◽  
Meng-Yi Tai ◽  
Vey Wang
Keyword(s):  
Monetary Policy ◽  
Open Economy ◽  
Stock Price ◽  
Small Open Economy ◽  
Price Dynamics
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