On the fundamental Deficiencies of Current monetary Policy

2014 ◽  
pp. 80-100 ◽  
Author(s):  
A. Apokin ◽  
D. Belousov ◽  
I. Goloshchapova ◽  
I. Ipatova ◽  
O. Solntsev
Keyword(s):  
Monetary Policy ◽  
Financial System ◽  
Output Gap ◽  
Rule Based ◽  
Policy Rules ◽  
Monetary Policy Rules ◽  
Economic Agents ◽  
Policy Review ◽  
Potential Gdp

We outline three main shortcomings of current monetary policy in Russia for 2014. First, monetary policy is too strict: we estimate output gap over -3% potential GDP, and rule-based key rate is 6,25%. Second, Bank of Russia in 2014 clearly ignores its second goal of promoting stable and developing financial system. Third, today economic agents lack for clear expectations of monetary policy rules, and it is Bank of Russia’s duty to help forming these expectations - both through public commitments and independent monetary policy review.

scholarly journals Monetary Policy Rules in Emerging ASEAN Economies

2021 ◽  
Vol 12 (3) ◽  
pp. 255-274
Author(s):  
Mesa Wanasilp
Keyword(s):  
Monetary Policy ◽  
Method Of Moments ◽  
Inflation Targeting ◽  
Generalized Method Of Moments ◽  
The Philippines ◽  
Policy Implications ◽  
Output Gap ◽  
Policy Rules ◽  
Monetary Policy Rules ◽  
The Difference

This paper examines the monetary policy rules for five emerging ASEAN economies—Indonesia, the Philippines, and Thailand as the adopters of inflation targeting (IT) and Malaysia and Vietnam as the non-IT adopters. For the methodology, this study applies a generalized method of moments that provides a consistent and efficient estimator for the estimation that contains endogenously determined variables. The questions are whether the rules of the IT adopters have fulfilled the Taylor principle and what has been the difference in the rules between the IT adopters and the non-IT adopters. The main findings are as follows: Regarding the IT adopters, their rules are characterized by inflation-responsive rules fulfilling the Taylor principle. As for the non-IT adopters, Malaysia follows solely an output-gap responsive rule, and Vietnam exhibits the mixed rules. The policy implications are that for the IT adopters there might be room to make their policy-rate responses more elastic to inflation, and that for the non-IT adopters, there would be a need to adopt an explicit IT framework.

scholarly journals The Dependence of China’s Monetary Policy Rules on Interest Rate Regimes: Empirical Analysis Based on a Pseudo Output Gap

2019 ◽  
Vol 11 (9) ◽  
pp. 2557
Author(s):  
Xiaoyu Zhang ◽  
Fanghui Pan
Keyword(s):  
Growth Rate ◽  
Monetary Policy ◽  
Interest Rate ◽  
Central Bank ◽  
Interest Rates ◽  
Policy Preferences ◽  
Output Gap ◽  
Policy Rules ◽  
Monetary Policy Rules ◽  
Nominal Interest Rates

Although a large number of scholars have studied the policy preferences and monetary policy rules of China’s central bank, most have found no evidence that China’s central bank has adjusted the nominal interest rates against the output gap. By constructing the pseudo output gap defined by the deviation of the real output growth rate and the target growth rate, this paper finds that China’s central bank prefers to adjust the nominal interest rates against the pseudo output gap. The monetary policy preferences and rules of China’s central bank in different interest rate regimes are investigated based on the threshold Taylor rule model. It is found that, in the high-interest-rate regime, the central bank adjusts the nominal interest against the inflation gap and the pseudo output gap, while in the low-interest-rate regime, there is no evidence that the central bank adjusts the nominal interest rates against the pseudo output gap. The lower bound of interest rate reduction and the weakening of interest rate policy effects caused by the liquidity trap of the interest rate are the possible reasons for China’s central bank not to adjust the nominal interest rates against the pseudo output gap.

scholarly journals Monetary Policy Rules in Emerging ASEAN Economies

2021 ◽  
Vol 12 (3) ◽  
pp. 0-0
Keyword(s):  
Monetary Policy ◽  
Method Of Moments ◽  
Inflation Targeting ◽  
Generalized Method Of Moments ◽  
The Philippines ◽  
Policy Implications ◽  
Output Gap ◽  
Policy Rules ◽  
Monetary Policy Rules ◽  
The Difference

This paper examines the monetary policy rules for five emerging ASEAN economies: Indonesia, the Philippines, and Thailand as the adopters of inflation targeting (IT), and Malaysia and Vietnam as the non-IT adopters. For the methodology, this study applies a generalized method of moments that provides a consistent and efficient estimator, for the estimation that contains endogenously determined variables. The questions are: whether the rules of the IT adopters have fulfilled the Taylor principle, and what has been the difference in the rules between the IT adopters and the non-IT adopters. The main findings are as follows. Regarding the IT adopters, their rules are characterized by inflation-responsive rules fulfilling the Taylor principle. As for the non-IT adopters, Malaysia follows solely an output-gap responsive rule; and Vietnam exhibits the mixed rules. The policy implications are that for the IT adopters there might be room to make their policy-rate responses more elastic to inflation; and that for the non-IT adopters there would be a need to adopt an explicit IT framework.

scholarly journals Monetary policy rule for Poland – results for various specifactions

2011 ◽  
Vol 2 (3) ◽  
pp. 5-21 ◽  
Author(s):  
Paweł Baranowski
Keyword(s):  
Monetary Policy ◽  
Interest Rate ◽  
Monetary Authority ◽  
Output Gap ◽  
Reaction Function ◽  
Policy Rule ◽  
Policy Rules ◽  
Monetary Policy Rules ◽  
Monetary Policy Rule ◽  
The Interest Rate

The aim of the paper is to analyse monetary policy rules for Poland. We estimate models based on the proposition of Taylor (1993), augmented with interest rate smoothing. We deal with the case of instantaneous as well as forward-looking relationship between interest rate and inflation. In the latter case, the proposition of data-rich reaction function (Bernanke and Boivin, 2003) was also considered. The evidence show that Polish monetary authority reaction to inflation is strong, contrary to the output gap. In addition, we found strong interest smoothing, which implies time-distributed response of the interest rate.

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