Format:
Online-Ressource (37 S.)
,
graph. Darst.
ISBN:
9781513572574
,
1513572571
Series Statement:
IMF working paper 15/205
Content:
In closed or open economy models with complete markets, targeting core inflation enables monetary policy to maximize welfare by replicating the flexible price equilibrium. We analyze this result in the context of developing economies, where a large proportion of households are credit constrained and the share of food expenditures in total consumption expenditures is high. We develop an open economy model with incomplete financial markets to show that headline inflation targeting improves welfare outcomes. We also compute the optimal price index, which includes a positive weight on food prices but, unlike headline inflation, assigns zero weight to import prices
Additional Edition:
Erscheint auch als Druck-Ausgabe Anand, Rahul What Measure of Inflation Should a Developing Country Central Bank Target? Washington, D.C. : International Monetary Fund, 2015 ISBN 9781513572574
Language:
English
Keywords:
Arbeitspapier
;
Graue Literatur
DOI:
10.5089/9781513572574.001
Author information:
Prasad, Eswar S. 1965-
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