Arbeitspapier
Inflation targeting by debtor central banks in emerging market economies
Given buoyant capital inflows and managed exchange rates the majority of emerging market central banks have continued to accumulate massive foreign reserves. If left unsterilized, the liquidity expansion can threaten domestic macroeconomic stability. To contain domestic inflation these central banks absorb rather then provide liquidity in their regular monetary policy operations. Based on an augmented Barro-Gordon framework we show that inflation targeting within an environment of surplus liquidity is less efficient, because absorbing liquidity raises the costs of monetary policy operations. By implementing sterilization costs into the central bank's objective function the inflation bias increases.
- Sprache
-
Englisch
- Erschienen in
-
Series: CESifo Working Paper ; No. 3138
- Klassifikation
-
Wirtschaft
Monetary Policy
Central Banks and Their Policies
- Thema
-
inflation targeting
exchange rate targeting
sterilization
debtor central bank
Inflation Targeting
Wechselkurspolitik
Geldpolitik
Kapitalimport
Währungsreserven
Gesamtwirtschaftliche Liquidität
Aufstrebende Märkte
Theorie
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Löffler, Axel
Schnabl, Gunther
Schobert, Franziska
- Ereignis
-
Veröffentlichung
- (wer)
-
Center for Economic Studies and ifo Institute (CESifo)
- (wo)
-
Munich
- (wann)
-
2010
- Handle
- Letzte Aktualisierung
- 10.03.2025, 11:43 MEZ
Datenpartner
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Objekttyp
- Arbeitspapier
Beteiligte
- Löffler, Axel
- Schnabl, Gunther
- Schobert, Franziska
- Center for Economic Studies and ifo Institute (CESifo)
Entstanden
- 2010
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