@techreport{Adam2008Monetary,
abstract = {We examine the properties of alternative monetary policy rules in response to large aid surges in low-income countries characterized by incomplete capital market integration and currency substitution. Using a dynamic stochastic general equilibrium model, we show that simple monetary rules that stabilize the path of expected future seigniorage for a given aid flow have attractive properties relative to a range of conventional alternatives, including those involving heavy reliance on bond sterilization or a commitment to a pure exchange rate float. These simple rules, which are shown to be robust across a range of fiscal responses to aid inflows, appear to be consistent with actual responses to recent aid surges in a range of post-stabilization countries in Sub-Saharan Africa.},
address = {Helsinki},
author = {Christopher Adam and Edward Buffie and Stephen O'Connell and Catherine Pattillo},
copyright = {http://www.econstor.eu/dspace/Nutzungsbedingungen},
isbn = {978-92-9230-131-6},
keywords = {O23; E52; F31; F35; 330; monetary policy; currency substitution; aid; Africa; DSGE models; Geldpolitik; Entwicklungshilfe; Dynamisches Gleichgewicht; Afrika},
language = {eng},
number = {2008.77},
publisher = {UNU-WIDER},
title = {Monetary policy rules for managing aid surges in Africa},
type = {Research paper / UNU-WIDER},
url = {http://hdl.handle.net/10419/45052},
year = {2008}
}
