01825cas a2200241 a 4500 AALejournalIMF003761 230101c9999 xx r poo 0 0eng d 5.00 USD 9781451861952 1018-5941 BD-DhAAL BD-DhAAL Sgherri, Silvia. Explicit and Implicit Targets in Open Economies / Silvia Sgherri. Washington, D.C. : International Monetary Fund, 2005. 1 online resource (27 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students Under a flexible inflation targeting regime, should policymakers avoid any reaction to movements in the foreign exchange market? Using data for six advanced open economies explicitly targeting inflation, the paper examines empirically whether real exchange rate disequilibria systematically affect the conduct of monetary policy. Estimates indicate that monetary policy responses in inflation-targeting, open economies have changed significantly, as the institutional framework for the conduct of monetary policy has evolved. In particular, an explicit target for core inflation and a greater use of the expectation channel of monetary policy appear to be key features of the newest policy framework. In this context, central banks are unlikely to react to regular fluctuations in the exchange rate. Mode of access: Internet IMF Working Papers; Working Paper ; No. 2005/176 Full text available on IMF http://elibrary.imf.org/view/journals/001/2005/176/001.2005.issue-176-en.xml IMF e-Library