Trinity Strikes Back : Monetary Independence and Inflation in the Caribbean /
Monetary independence is at the core of the macroeconomic policy trilemma stating that an independent monetary policy, a fixed exchange rate and free movement of capital cannot exist at the same time. This study examines the relationship between monetary autonomy and inflation dynamics in a panel of...
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| Format: | Revija |
| Jezik: | English |
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Washington, D.C. :
International Monetary Fund,
2019.
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| Serija: | IMF Working Papers; Working Paper ;
No. 2019/197 |
| Online dostop: | Full text available on IMF |
| Izvleček: | Monetary independence is at the core of the macroeconomic policy trilemma stating that an independent monetary policy, a fixed exchange rate and free movement of capital cannot exist at the same time. This study examines the relationship between monetary autonomy and inflation dynamics in a panel of Caribbean countries over the period 1980-2017. The empirical results show that monetary independence is a significant factor in determining inflation, even after controlling for macroeconomic developments. In other words, greater monetary policy independence, measured as a country's ability to conduct its own monetary policy for domestic purposes independent of external monetary influences, leads to lower consumer price inflation. This relationship-robust to alternative specifications and estimation methodologies-has clear policy implications, especially for countries that maintain pegged exchange rates relative to the U.S. dollar with a critical bearing on monetary autonomy. |
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| Opis knjige/članka: | <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required |
| Fizični opis: | 1 online resource (19 pages) |
| Format: | Mode of access: Internet |
| ISSN: | 1018-5941 |
| Dostop: | Electronic access restricted to authorized BRAC University faculty, staff and students |