Commodity Price Shocks and Imperfectly Credible Macroeconomic Policies in Commodity Exporting Small Open Economies is popular PDF and ePub book, written by Juan Pablo Medina Guzman in 2014-02-13, it is a fantastic choice for those who relish reading online the Business & Economics genre. Let's immerse ourselves in this engaging Business & Economics book by exploring the summary and details provided below. Remember, Commodity Price Shocks and Imperfectly Credible Macroeconomic Policies in Commodity Exporting Small Open Economies can be Read Online from any device for your convenience.
Commodity Price Shocks and Imperfectly Credible Macroeconomic Policies in Commodity Exporting Small Open Economies Book PDF Summary
In this paper, we analyze how lack of credibility and transparency of monetary and fiscal policies undermines the effectiveness of macroeconomic policies to isolate the economy from commodity price fluctuations. We develop a general equilibrium model for a commodity-exporting economy where macro policies are conducted through rules. We show that the responses of output, aggregate demand, and inflation to an increase in commodity price are magnified when these rules are imperfectly credible and lack transparency. If policies are imperfectly credible, then transparency helps private agents to learn the systematic behavior of the autorities, reducing the effects of commodity prices shocks. Coherent with the model, we show cross-country evidence that monetary policy transparency and fiscal credibility reduce the incidence of export price volatility on output volatility. Also, our results indicate that having an explicit fiscal rule and an inflation targeting regime contribute to isolate the economy from terms of trade fluctuations.
Detail Book of Commodity Price Shocks and Imperfectly Credible Macroeconomic Policies in Commodity Exporting Small Open Economies PDF
- Author : Juan Pablo Medina Guzman
- Release : 13 February 2014
- Publisher : International Monetary Fund
- ISBN : 9781484306390
- Genre : Business & Economics
- Total Page : 43 pages
- Language : English
- PDF File Size : 15,8 Mb
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