01860cas a2200253 a 4500 AALejournalIMF015397 230101c9999 xx r poo 0 0eng d 5.00 USD 9781513501703 1018-5941 BD-DhAAL BD-DhAAL Portillo, Rafael. A Model for Monetary Policy Analysis in Uruguay / Rafael Portillo, Yulia Ustyugova. Washington, D.C. : International Monetary Fund, 2015. 1 online resource (29 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 Uruguay has recently reverted to a money targeting (MT) framework in the context of a disinflation strategy. We develop a quantitative model for monetary policy analysis incorporating money targets in the policy framework while also retaining a central role for interest rates in the transmission of policy. We use the model to show that tight financial conditions for a period may be necessary for inflation to converge to the middle of the target band. We also discuss various aspects of the MT framework. Two issues stand out. Excessive focus on hitting money targets can result in undesirable changes in the policy stance; while targets that incorporate elements of money demand forecasting are superior to targets that are excessively smooth or do not adjust for base effects. Mode of access: Internet Ustyugova, Yulia. IMF Working Papers; Working Paper ; No. 2015/170 Full text available on IMF http://elibrary.imf.org/view/journals/001/2015/170/001.2015.issue-170-en.xml IMF e-Library