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Inflation-Forecast Targeting : Applying the Principle of Transparency / Kevin Clinton, Charles Freedman, Michel Juillard, Ondrej Kamenik, Douglas Laxton, Hou Wang.
- Format:
- Book
- Government document
- Author/Creator:
- Clinton, Kevin.
- Series:
- IMF Working Papers; Working Paper ; No. 2015/132
- IMF Working Papers
- Language:
- English
- Subjects (All):
- Anti-inflationary policies.
- Inflation (Finance)--Econometric models.
- Inflation (Finance)--Forecasting.
- Monetary policy--Econometric models.
- Local Subjects:
- Anti-inflationary policies.
- Inflation (Finance)--Econometric models.
- Inflation (Finance)--Forecasting.
- Monetary policy--Econometric models.
- Physical Description:
- 1 online resource (86 p.)
- Place of Publication:
- Washington, D.C. : International Monetary Fund, 2015.
- Summary:
- Many central banks in emerging and advanced economies have adopted an inflation-forecast targeting (IFT) approach to monetary policy, in order to successfully establish a stable, low-inflation environment. To support policy making, each has developed a structured system of forecasting and policy analysis appropriate to its needs. A common component is a model-based forecast with an endogenous policy interest rate path. The approach is characterized, among other things, by transparent communications—some IFT central banks go so far as to publish their policy interest rate projection. Some elements of this regime, although a work still in progress, are worthy of consideration by central banks that have not yet officially adopted full-fledged inflation targeting.
- Contents:
- ""Cover Page""; ""Title Page""; ""Copyright Page""; ""Contents""; ""TABLES""; ""Figures""; ""References""; ""I. INTRODUCTION""; ""II. SOME HISTORY OF INFLATION TARGETING""; ""III. BACKGROUND ON INFLATION-FORECAST TARGETING""; ""III.1 Defining IFT""; ""III.2 Long-run expectations anchor to IFT""; ""III.2.1 The anchor""; ""Figure 1. Monetary Policy Model: IFT Feedback Response and Transmission""; ""III.2.2 The transmission mechanism""; ""III.2.3 Endogenous policy response""; ""III.2.4 Publication of endogenous interest rate forecasts""; ""IV. USING IFT TO HELP AVOID DARK CORNERS""
- ""IV.1 Implied forward guidance in IFT""""IV.2 Deflation risk in Japan and the euro area""; ""Figure 2. Inflation Expectations and Unemployment Rate in Japan""; ""Table 1. Selected Economic Indicators for Japan and Canada""; ""Figure 3. Japan Sectoral Stock Market Indices versus Exchange Rate""; ""Figure 4. Inflation Expectations and Unemployment Rate in the Euro Area""; ""Figure 5. Evolution of Policy Rates in US, Euro Area, Japan, UK and the Czech""; ""Figure 6. Consensus Forecasts for Wage and Consumption in Major Economies""; ""Table 2. Consensus CPI Inflation Expectations""
- ""V. ILLUSTRATIVE EXAMPLES OF POLICY-MAKING STRATEGY BASED ON A SIMPLE MODEL""""V.1 Introduction""; ""V.2 Outline of the model""; ""V.3 Illustrative simulation results""; ""V.3.1 Policy response to current economic situation""; ""Figure 7. Illustrative Example of the Current Situation: IFB Reaction Function versus a Dual""; ""Figure 8. Comparison of 4 Reaction Functions for the Current Situation (Part 1)""; ""Figure 9. Comparison of 4 Reaction Functions for the Current Situation (Part 2)""; ""V.3.2 Demand shocks""; ""Figure 10. Vulnerabilities Related to the ZLB under IFB Reaction Function""
- ""Figure 11. Vulnerabilities Related to the ZLB under Dual Mandate CB Optimal Control (DM1)""""V.3.3 Supply shocks""; ""Figure 12. Comparison of 4 Reaction Functions for Illustrative Nasty Supply Shock (Part 1)""; ""Figure 13. Comparison of 4 Reaction Functions for Illustrative Nasty Supply Shock (Part 2)""; ""Figure 14. Illustrative Examples of the Current Situation with Confidence Bands""; ""Figure 15. Illustrative Examples of the Current Situation with Confidence Bands""; ""V.3.4 A summing up""; ""V.4 Confidence intervals and alternative simulations""
- ""Figure 16. Illustrative Examples of the Current Situation with Confidence Bands""""Figure 17. Illustrative Examples of Nasty Supply Shock with Confidence Bands""; ""Figure 18: Illustrative Examples of Nasty Supply Shock with Confidence Bands""; ""Figure 19: Illustrative Examples of Nasty Supply Shock with Confidence Bands""; ""VI. CONCLUSION""; ""References""; ""Footnotes""
- Notes:
- Description based upon print version of record.
- Description based on print version record.
- ISBN:
- 9781513582924
- 1513582925
- 9781513544755
- 1513544756
- OCLC:
- 916950250
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