scholarly journals Allan Meltzer and the Search for a Nominal Anchor

Review ◽  
2018 ◽  
Vol 100 (2) ◽  
pp. 117-126
Author(s):  
James Bullard ◽  
Keyword(s):  
Nominal Anchor

The Great Depression and the Great Recession in Interwar Greece and Today: A comparison

2015 ◽  
Vol 66 (2) ◽  
Author(s):  
Sophia Lazaretou
Keyword(s):  
Great Recession ◽  
Empirical Studies ◽  
Economic Downturn ◽  
The Great Recession ◽  
The Past ◽  
Greek Crisis ◽  
The Great Depression ◽  
Terra Incognita ◽  
Cross Country ◽  
Nominal Anchor

AbstractThe past Greek crisis experience is more or less terra incognita. In all historical empirical studies Greece is systematically neglected or included only sporadically in their cross-country samples. In the national literature too there is little on this topic. In this paper we use the 1930s crisis as a useful testing ground to compare the two crises episodes, ‘then’ and ‘now’; to detect differences and similarities and discuss the policy facts with the ultimate aim to draw some ‘policy lessons’ from history. To the best of our knowledge, this is the first attempt to study the Greek crisis experience across the two historical episodes. Comparisons with the interwar period show that the recent economic downturn was faster, larger and more severe than during the early 1930s. More importantly, analysing the determinants of the two crises, we conclude that Greece’s problems arose from its inability to credibly adhere to a nominal anchor.

INFLATION TARGETING: IT'S NOT BROKE, IT DOESN'T NEED FIXING, BUT CAN IT SURVIVE?

2010 ◽  
Vol 01 (01) ◽  
pp. 59-80
Author(s):  
PIERRE L. SIKLOS
Keyword(s):  
Monetary Policy ◽  
Inflation Targeting ◽  
Global Financial Crisis ◽  
Emerging Market ◽  
Asset Price ◽  
Central Banks ◽  
Economic Downturn ◽  
Price Increases ◽  
The Global Financial Crisis ◽  
Nominal Anchor

Until the end of 2005 there were few outward signs that the inflation targeting (IT) monetary policy strategy was deemed fragile or that the likelihood of abandoning it was high. In light of the severe economic downturn and the global financial crisis that has afflicted most economies around the world since at least 2008, it is worth reconsidering the question of the fragility of the inflation targeting regime. This paper reprises the approach followed in Siklos (2008) but adds important new twists. For example, the present study asks whether the continued survival of IT is due to the fact that some of the central banks in question did take account of changes in financial stress. The answer is no. Indeed, many central banks are seen as enablers of rapid asset price increases. The lesson, however, is not that inflation targeting needs to be repaired. Instead, refinements should be considered to the existing inflation targeting strategy which has evolved considerably since it was first introduced in New Zealand 20 years ago. Most notably, there should be continued emphasis on inflation as the primary nominal anchor of monetary policy, especially in emerging market economies (EME), even if additional duties are assigned to central banks in response to recent events.

scholarly journals On the (Ir)Relevance of Monetary Aggregate Targeting in Pakistan: An Eclectic View

2013 ◽  
Vol 18 (2) ◽  
pp. 65-119
Author(s):  
Adnan Haider ◽  
Asad Jan ◽  
Kalim Hyder
Keyword(s):  
Monetary Policy ◽  
Money Demand ◽  
Demand Function ◽  
Policy Framework ◽  
Monetary Aggregate ◽  
Money Demand Function ◽  
Financial Innovations ◽  
The Stability ◽  
Nominal Anchor ◽  
Monetary Policy Framework

This study attempts to identify a stable money demand function for Pakistan’s economy, where the monetary aggregate is considered the nominal anchor. With evolving financial innovations and regulations, the stability of money demand has been the focus of numerous debates. Where earlier studies have provided conflicting explanations due to inadequate specifications and imprecise estimations, we find that money demand in Pakistan is stable, if specified properly. For developing countries such as Pakistan, it is important to target monetary aggregates or respond to deviations from the desirable path if monetary policy is to be effectively implemented and communicated; this should remain, if not a primary, then an auxiliary target in the monetary policy framework.

Argentine elections will drive monetary expansion

2015 ◽  
Keyword(s):  
Exchange Rate ◽  
Foreign Exchange ◽  
Policy Framework ◽  
Close Monitoring ◽  
Exchange Market ◽  
Content Type ◽  
Official Exchange Rate ◽  
The Government ◽  
Nominal Anchor ◽  
Monetary Policy Framework

Subject The Central Bank's 2015 monetary programme. Significance The Central Bank's (BCRA) 2015 monetary programme indicates that the main features of the current monetary policy framework -- characterised by an expansionary bias, foreign exchange controls and close monitoring of the informal exchange market -- will continue this year. Impacts The government will prioritise exchange rate stability, at the expense of economic activity. The BCRA will continue using the official exchange rate as a nominal anchor. Foreign exchange controls may be extended to discourage devaluation expectations and to protect international reserves.

scholarly journals Adopting Inflation Targeting in Pakistan: An Empirical Analysis

2010 ◽  
Vol 15 (2) ◽  
pp. 51-76 ◽  
Author(s):  
Nadia Saleem
Keyword(s):  
Monetary Policy ◽  
Inflation Targeting ◽  
Inflation Rate ◽  
Policy Option ◽  
Price Stability ◽  
Potential Candidate ◽  
Long Run ◽  
The Interest Rate ◽  
Nominal Anchor

The objective of this paper is to assess the conditions for inflation targeting in Pakistan. The recent inflationary surge in Pakistan calls for rethinking monetary policy afresh. This paper argues the case for inflation targeting in Pakistan as a policy option to achieve price stability. The country experienced an inflation rate of just below 10 percent during 1970-2009, which makes it a potential candidate for inflation targeting. Applying the VAR technique to data for the same period, inflation is shown to be adaptive in nature, leading us to reject the accelerationist hypothesis. The Lucas critique holds as people are found to use forward-looking models in forming expectations about inflation. The paper also sheds some light on the State Bank of Pakistan’s level of preparedness for the possibility of adopting inflation targeting, for which transparency and autonomy are prerequisites. The interest rate channel can play the role of a nominal anchor in the long run.

Who Is Voting for Low Inflation and Why?

2013 ◽  
Author(s):  
Brigitte Granville
Keyword(s):  
Exchange Rate ◽  
Latin American ◽  
Inflation Rate ◽  
The Real ◽  
The Exchange Rate ◽  
Nominal Anchor ◽  
The Impact ◽  
Real Challenge ◽  
Latin American Countries

This chapter analyzes the impact of low inflation. It argues that despite repeated efforts by governing authorities to initiate anti-inflationary policies, long-lasting stabilization can prove elusive. Reducing inflation is one thing, but keeping it down is the real challenge. The chapter highlights the experiences of some Latin American countries in the 1970s and 1980s, Russia in the 1990s, and Argentina in the 2000s. One typical mistake was to choose the exchange rate as the nominal anchor, which allows the inflation rate to be reduced quickly, but its effect is temporary, as governments often use lower inflation as a reason to delay the necessary fiscal tightening, eventually leading to the collapse of the exchange rate peg and inflation striking back with a vengeance.

The Choice of Nominal Targets in an Open Economy

2021 ◽  
pp. 225-292
Author(s):  
Juan Antonio Morales ◽  
Paul Reding
Keyword(s):  
Open Economy ◽  
Inflation Targeting ◽  
Sub Saharan Africa ◽  
Monetary Targeting ◽  
Exchange Rate Targeting ◽  
Sub Saharan ◽  
International Borrowing ◽  
Nominal Anchor ◽  
Special Case

Monetary anchors play a central role in the practice of monetary policy in LFDCs. Not all LFDCs have an explicit monetary anchor, but if so they rely on three alternative frameworks: exchange rate targeting, monetary targeting, and inflation targeting. This chapter discusses, for each nominal anchor, the advantages, drawbacks, and prerequisites for adopting it, the modalities of implementing it, strictly or flexibly, and the various challenges it raises. The presentation combines theoretical arguments, discussions of empirical evidence, and analysis of selected experiences of LFDCs. The special case of anchors in dollarized economies is examined in depth. The chapter contains two appendices. The first deals with international reserves and their international borrowing arrangements. The second is a case study of monetary unions in sub-Saharan Africa.

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