The Bank of Canada's Monetary Policy Framework: Have Recent Changes Enhanced Central Bank Credibility?

Abstract This paper aims at analysing whether the Central Bank of the Republic of Turkey (CBRT), designing a new monetary policy framework to achieve financial stability in the last quarter of 2010, tries to pursue financial stability by putting price stability on the back burner. To this end, a forward-looking reaction function that is extended with nominal exchange rate gap and nominal domestic credits gap is estimated for the CBRT. The paper first performs unit root and cointegration tests and finds that the variables become stationary at first differences and that there is a cointegration relationship among variables. Then, the paper conducts the Kalman filter to obtain time varying parameters. The findings show that the coefficients of all explanatory variables did not change too much after the new monetary policy framework of the CBRT in the last quarter of 2010. Therefore, this paper asserts that the CBRT continues to pursue price stability as its primary goal and tries to achieve financial stability by using macroprudential tools. Thus this paper concludes that financial stability concerns have not changed the priority of the CBRT.

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Central Bank Independence and Inflation Targeting: Monetary Policy Framework for Sub-saharan Africa

The International Journal of Applied Economics and Finance ◽

10.3923/ijaef.2007.29.37 ◽

2007 ◽

Vol 1 (1) ◽

pp. 29-37 ◽

Cited By ~ 3

Author(s):

Oyedokun Agbeja .

Keyword(s):

Monetary Policy ◽

Central Bank ◽

Inflation Targeting ◽

Central Bank Independence ◽

Sub Saharan Africa ◽

Policy Framework ◽

Sub Saharan ◽

Monetary Policy Framework

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On the Role of Money Targets in the Monetary Policy Framework in SSA

10.1093/oso/9780198785811.003.0008 ◽

2018 ◽

Author(s):

Andrew Berg ◽

Rafael Portillo ◽

Filiz Unsal

Keyword(s):

Monetary Policy ◽

Interest Rate ◽

Central Bank ◽

Low Income ◽

New Keynesian ◽

Policy Framework ◽

Low Income Countries ◽

Money Growth ◽

Ex Post ◽

Monetary Policy Framework

Many low-income countries continue to describe their monetary policy framework in terms of targets on monetary aggregates. This chapter extends the New Keynesian model to provide a role for ‘M’ in the conduct of monetary policy, and examine the conditions under which some adherence to money targets is optimal. In the spirit of Poole (1970), this role is based on the incompleteness of information available to the central bank, a pervasive issue in these countries. Ex ante announcements and forecasts for money growth are consistent with a Taylor rule for the relevant short-term interest rate. Ex post, the policymaker must choose his relative adherence to interest rate and money growth targets. The chapter shows that some adherence to previously set money targets can emerge endogenously from the signal extraction problem faced by the central bank. The chapter also provides an analytical representation of the factors influencing the degree of optimal target adherence.

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Alternative Core Inflation Measures in Nigeria: An Examination

Applied Economics and Finance ◽

10.11114/aef.v7i4.4911 ◽

2020 ◽

Vol 7 (4) ◽

pp. 112

Author(s):

Ladi R. Bala-Keffi ◽

Donald G. Mbaka ◽

Nuruddeen Usman

Keyword(s):

Monetary Policy ◽

Central Bank ◽

Inflation Targeting ◽

Central Banks ◽

Policy Framework ◽

Communication Tool ◽

Core Inflation ◽

Aid Policy ◽

Central Bankers ◽

Monetary Policy Framework

Core inflation measures have played an important role in the conduct of monetary policy at various central banks around the world. We examine core inflation in Nigeria using non-traditional measures and assess their persistence, to determine whether the Central Bank of Nigeria (CBN) should pay attention to one or other of these measures when assessing inflation developments. We find that the two new measures outperform the official core rate in tracking the persistence of headline inflation. The findings of this study will aid policy making within the Central bank of Nigeria (CBN) particularly where inflation targeting is adopted as the monetary policy framework. These core inflation measures provide a useful guide to central bankers both for monetary policy decisions and as a communication tool. They are a better predictor of future inflation depicting the more persistent influences on underlying inflation, which are of interest to policymakers (e.g. Clark, 2001; Blinder and Reis, 2005; Smith, 2004 and Dolmas &Wynne, 2008).

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REFLEXIONES Y PERSPECTIVAS A 25 AÑOS DE LA AUTONOMÍA DEL BANCO DE MÉXICO

Investigación Económica ◽

10.22201/fe.01851667p.2019.310.71545 ◽

2019 ◽

Vol 78 (310) ◽

pp. 11 ◽

Cited By ~ 1

Author(s):

Jonathan Heath ◽

Jaime Acosta Margain

Keyword(s):

Monetary Policy ◽

Central Bank ◽

Foreign Exchange ◽

International Reserve ◽

Policy Framework ◽

Price Stability ◽

Reserve Management ◽

Exchange Policy ◽

Communication Policies ◽

Monetary Policy Framework

En este artículo se hace una serie de reflexiones sobre los retos y logros que el Banco de México ha enfrentado en sus primeros 25 años de vida autónoma. Se detallan los elementos claves en el diseño institucional para el cumplimiento de su mandato prioritario: la estabilidad del poder adquisitivo de la moneda. En particular, se destaca la evolución de los cambios en el régimen monetario y en la instrumentación de la política monetaria para alcanzar ese fin. De igual manera, se comentan otros aspectos que han sido relevantes en este periodo de la vida autónoma del banco central, tales como la política cambiaria, el manejo de las reservas internacionales, así como la política de rendición de cuentas y la estrategia de comunicación. REFLECTIONS AND PERSPECTIVES AT 25 YEARS OF THE AUTONOMY OF THE BANCO DE MÉXICO ABSTRACT This paper describes the challenges and achievements that Banco de México has faced during its first twenty-five years of autonomy. The paper offers some insights about key institutional features that were decisive in fulfilling the central bank’s main mandate: Price stability. The article also outlines the evolution of the monetary policy framework and the central bank operations in order to achieve the central bank main goal. Similarly, other elements such as foreign exchange policy, international reserve management, accountability and communication policies are also discussed.

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The use of reserve requirements in an optimal monetary policy framework

10.32468/be.0 ◽

2012 ◽

Author(s):

Hernando Vargas-Herrera ◽

Pamela Andrea Cardozo-Ortiz

Keyword(s):

Monetary Policy ◽

Policy Framework ◽

Optimal Monetary Policy ◽

Reserve Requirements ◽

Monetary Policy Framework

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Monetary Policy in the Post Keynesian Theoretical Framework

Brazilian Journal of Political Economy ◽

10.1590/0101-31572016v37n01a03 ◽

2017 ◽

Vol 37 (1) ◽

pp. 45-64

Author(s):

FÁBIO HENRIQUE BITTES TERRA ◽

PHILIP ARESTIS

Keyword(s):

Monetary Policy ◽

Interest Rate ◽

Inflation Targeting ◽

Debt Management ◽

Policy Framework ◽

Original Writings ◽

Policy Model ◽

Original Contribution ◽

The Interest Rate ◽

Monetary Policy Framework

ABSTRACT The purpose of this contribution is to develop a Post Keynesian monetary policy model, presenting its goals, tools, and channels. The original contribution this paper develops, following (Keynes’s 1936, 1945) proposals, is the use of debt management as an instrument of monetary policy, along with the interest rate and regulation. Moreover, this paper draws its monetary policy model by broadly and strongly relying on Keynes’s original writings. A monetary policy model erected upon this basis relates itself directly to the Post Keynesian efforts to offer a monetary policy framework substantially different from the Inflation Targeting Regime of the New Macroeconomic Consensus.

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