EconStor >
Bank of Canada, Ottawa >
Bank of Canada Working Papers >

Please use this identifier to cite or link to this item:

http://hdl.handle.net/10419/53934
  

Full metadata record

DC FieldValueLanguage
dc.contributor.authorDe Resende, Carlosen_US
dc.contributor.authorDib, Alien_US
dc.contributor.authorKichian, Maralen_US
dc.date.accessioned2011-12-15T12:58:24Z-
dc.date.available2011-12-15T12:58:24Z-
dc.date.issued2010en_US
dc.identifier.urihttp://hdl.handle.net/10419/53934-
dc.description.abstractInflation-targeting central banks around the world often state their inflation objectives with regard to the consumer price index (CPI). Yet the literature on optimal monetary policy based on models with nominal rigidities and more than one sector suggests that CPI inflation is not always the best choice from a social welfare perspective. We revisit this issue in the context of an estimated multi-sector New-Keynesian small open economy model where sectors are heterogeneous along multiple dimensions. With key parameters of the model estimated using data from an inflation targeting economy, namely Canada, we particularly focus on (i) the role of sector-specific real rigidities, specially in the form of factor mobility costs, and (ii) welfare implications of targeting alternative price indices. Our estimations reveal considerable heterogeneity across sectors, and in several dimensions. Moreover, in contrast to existing studies, our welfare analysis comparing simple optimized policy rules based on alternative sectoral inflation rates provides support for CPI-based targeting policies by central banks. Capital mobility costs matter importantly in this regard.en_US
dc.language.isoengen_US
dc.publisherBank of Canada Ottawaen_US
dc.relation.ispartofseriesBank of Canada Working Paper 2010,9en_US
dc.subject.jelE4en_US
dc.subject.jelE52en_US
dc.subject.jelF3en_US
dc.subject.jelF4en_US
dc.subject.ddc330en_US
dc.subject.keywordInflation : costs and benefitsen_US
dc.subject.keywordInflation and pricesen_US
dc.subject.keywordInflation targetsen_US
dc.subject.keywordMonetary policy frameworken_US
dc.subject.keywordMonetary policy implementationen_US
dc.subject.stwGeldpolitiken_US
dc.subject.stwInflation Targetingen_US
dc.subject.stwLebenshaltungsindexen_US
dc.subject.stwKleines-offenes-Landen_US
dc.subject.stwFaktormobilitäten_US
dc.subject.stwWohlfahrtseffekten_US
dc.subject.stwStatistische Methodeen_US
dc.subject.stwKanadaen_US
dc.titleAlternative optimized monetary policy rules in multi-sector small open economiesen_US
dc.typeWorking Paperen_US
dc.identifier.ppn623481618en_US
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungenen_US
Appears in Collections:Bank of Canada Working Papers

Files in This Item:
File Description SizeFormat
623481618.pdf616.29 kBAdobe PDF
No. of Downloads: Counter Stats
Show simple item record
Download bibliographical data as: BibTeX

Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.