scholarly journals REVIEW TENTANG DESIGN MONETARY POLICY RULE UNTUK INDONESIA

IQTISHODUNA ◽  
2011 ◽  
Vol 3 (2) ◽  
Author(s):  
G. Sujana Budhiasa
Keyword(s):  
Monetary Policy ◽  
Inflation Targeting ◽  
Emerging Market ◽  
Policy Rule ◽  
Taylor Rules ◽  
The Public ◽  
Macroeconomic Modeling ◽  
Emerging Market Countries ◽  
Monetary Policy Rule ◽  
Single Instrument

The development monetary policy rule has become a fashionable macroeconomic modeling as pioneering by Taylor (1993)  Indonesia is one of emerging market countries that has advantages in adopting the Taylor monetary policy rule that was implementing together with inflation targeting framework dealing with the central bank law of Bank Indonesia on the new task for stabilizing the domestic currency, so that the new law of Bank Indonesia might be appropriate to adopt inflation targeting framework (Taylor, 2000). According to the new law, Bank Indonesia is obliged to announce the inflation plan at the beginning of the year to the public. Alamsyah, Agung and Zulverdy (2001), point-out that Bank Indonesia has become implemented the inflation targeting framework because it was obligated by the new law of Bank Indonesia. Practical of inflation targeting framework (ITF) in many countries adopted Taylor modified monetary policy rules with using many anchors. Svensson (1999) argued that because uncertain of some economic variables behavior, using interest rate as single anchor as recommended by Taylor rules can be robustness.Bank Indonesia have practical a single anchor called SBI Rate in implementing the inflation targeting framework.  SBI Rate is recommended by McNelis (1999) and also Darsono et. al (2002)  as the single instrument rule for managing  inflation gap and output gap in Indonesia.This paper is intends to study the development of policy rule theory and its possibility of those model developed for implementing at Bank Indonesia macroeconomic model.

scholarly journals Inflation targeting and monetary policy rule of the czech national bank

2001 ◽  
Vol 10 (4) ◽  
Author(s):  
Helena Horská
Keyword(s):  
Monetary Policy ◽  
Czech Republic ◽  
Inflation Targeting ◽  
The European Union ◽  
Policy Rule ◽  
The Czech Republic ◽  
Monetary Policy Rule ◽  
National Bank ◽  
Basic Features ◽  
Monetary Convergence

This paper deals with the inflation targeting regime in the Czech Republic. The study argues that inflation targeting is a monetary policy strategy that can be adopted by the central banks in more advanced transition economies. A dynamic model of inflation targeting in the Czech Republic is discussed in the context of achieving monetary convergence to the European Union. The specified monetary policy rule describes the basic features of the Czech National Bank's behaviour in the period March 1996 to June 2000.

scholarly journals Inflation targeting challenges in emerging market countries: The case of Serbia

2015 ◽  
Vol 60 (204) ◽  
pp. 7-30 ◽  
Author(s):  
Dejan Soskic
Keyword(s):  
Monetary Policy ◽  
Inflation Targeting ◽  
Emerging Market ◽  
Institutional Development ◽  
Policy Framework ◽  
Fiscal Discipline ◽  
Emerging Market Countries ◽  
Monetary Regime ◽  
Developed Nations ◽  
Monetary Policy Framework

In the past two decades Inflation targeting has been the monetary policy framework of choice for many developed nations around the world. A significant number of emerging market countries have gradually subscribed to the same monetary regime, but with different levels of success. Certain differences among emerging markets in terms of overall macroeconomic environment, strength of basic monetary policy tools, and institutional development have had an effect on the performance of inflation targeting. This paper focuses on the fulfilment of basic preconditions for implementation of inflation targeting in emerging market countries, and on results and challenges of inflation targeting implementation in Serbia more than six years after its introduction. Special attention is paid to high dollarization (euroization), which poses a serious challenge for inflation targeting, and to modification of the Taylor rule for dollarized economies. For inflation targeting in Serbia to be more effective, a (gradual) decrease in overall dollarization (euroization), fiscal discipline and sustainability, and an increase in the independence and capacity of the central bank are needed, among other things.

scholarly journals Monetary Policy Rule under Inflation Targeting in Mongolia

2018 ◽  
Vol 22 (4) ◽  
pp. 531-555 ◽  
Author(s):  
Hiroyuki Taguchi ◽  
Erdenechuluun Khishigjargal
Keyword(s):  
Monetary Policy ◽  
Inflation Targeting ◽  
Policy Rule ◽  
Monetary Policy Rule

scholarly journals Does Monetary Policy Credibility Help in Anchoring Inflation Expectations? Evidence from Six Inflation Targeting Emerging Economies

2021 ◽  
Vol 10 (1) ◽  
pp. 93-111
Author(s):  
Aslı Güler
Keyword(s):  
Monetary Policy ◽  
Central Bank ◽  
Emerging Economies ◽  
Inflation Targeting ◽  
Emerging Market ◽  
Inflation Expectations ◽  
Inflation Target ◽  
The Public ◽  
Inflation Expectation ◽  
Using Data

Abstract Most emerging market central banks have adopted inflation targeting as their monetary policy system. The heart of inflation targeting system is inflation expectations. The success of a central bank in achieving targets depends on to the extent to which inflation expectations are formed by the announced targets. As the credibility of the central bank increases, its ability to affect the public expectation also increases. The public adjusts its inflation expectations based on announced inflation target only in case of that they believe that the central bank has the sufficiency to reach the inflation target. Credibility enables expectation to be formed in a forward-looking way by weakening its connection with the past. This study aims to contribute to the literature concerning the effects of credibility on monetary policy. For this purpose, using data of six emerging inflation targeting economies (Turkey, Brazil, the Czech Republic, Chile, Poland, and South Africa), the empirical tests were carried out in order to understand the effect of the credibility on the behaviour of inflation expectation in emerging economies. The findings denote that credibility is quite relevant to reduce inflation expectations and contributes to the strength of inflation targets being an anchor for inflation expectations.

scholarly journals Pengujian Trilemma Conditions pada Perekonomian Indonesia

2017 ◽  
Vol 17 (2) ◽  
pp. 151-168
Author(s):  
Mela Yunita ◽  
Noer Azam Achsani ◽  
Lukytawati Anggraeni
Keyword(s):  
Monetary Policy ◽  
Exchange Rate ◽  
Inflation Targeting ◽  
Financial Integration ◽  
Exchange Rate Regime ◽  
Emerging Market ◽  
Emerging Market Countries ◽  
Constant Regression ◽  
Policy Objectives ◽  
Over Time

Testing the Trilemma Conditions of Indonesian EconomyThe key challenge for monetary policy in emerging market countries is simultaneously maintain monetary independence, exchange rate stability, and join with financial integration. This reseach explain the interaction of monetary policy in Indonesia over time to answer those three challenge with a Trilemma conditions. This research evaluate the Bank Indonesia’s decision to change the exchange rate regime and apllied ”inflation targeting”. The methods include to build the Trilemma’ index and testing the Trilemma with constant regression. The results indicate that Bank Indonesia has tradeoff in determining the combination of monetary policy objectives. Tradeoff for Bank Indonesia more heavy under free floating due to fear of floating’s problem and tradeoff lighter when inflation targeting applied.Keywords: Trilemma Hyphotesis; Different Exchange Rate Rezim; Inflation Targeting AbstrakTantangan utama kebijakan moneter di negara berkembang adalah secara bersamaan dapat mempertahankan independensi moneter, menjaga stabilitas nilai tukar, dan terlibat dalam integrasi keuangan global. Penelitian ini menjelaskan bagaimana kombinasi kebijakan moneter di Indonesia dari waktu ke waktu dapat menjawab ketiga tantangan tersebut dengan memenuhi kondisi Trilemma. Penelitian ini mengevaluasi keputusan Bank Indonesia mengubah rezim nilai tukar dan keputusan menerapkan target inflasi. Metode yang digunakan yaitu membangun indeks Trilemma dan mengujinya menggunakan constant regression. Hasilnya menunjukkan bahwa Bank Indonesia menghadapi tradeoff dalam menentukan kombinasi tujuan kebijakannya. Tradeoff lebih berat ketika periode rezim free floating karena adanya masalah fear of floating, sedangkan tradeoff lebih ringan ketika penerapan inflation targeting.

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