The general purpose of this study is to determine how South Africa’s early experience with the inflation targeting framework compares with the early experiences of Brazil, Chile, Israel, the Czech Republic and Poland. One developed economy, namely New Zealand, is included in the study since it was the pioneer of the inflation targeting framework. The experiences of these countries are compared along three dimensions: the stress tests the frameworks were subjected to and the monetary authorities’ responses to these tests; the adjustments made to the frameworks, operational and institutional procedures; and the credibility losses or gains as a result of these experiences. In order to arrive at a satisfactory conclusion to the problem a number of questions are explored. The theoretical basis of inflation targeting is analysed; the nature of South Africa’s framework is assessed to see how it conforms to general practices; South Africa’s early experience under the inflation targeting framework is assessed; and, lastly, South Africa’s experience is compared with the experiences of the six countries mentioned in the first paragraph. The assessment in this study shows that South Africa’s experience is not out of line when compared with other emerging-market countries. Many of the emerging markets surveyed faced significant stress tests and long-term obstacles that contributed to their failure to achieve their inflation targets in the early years of implementation. In response, the central banks surveyed sought to focus on the primary goal of monetary policy and to counter the second-round effects. As they became more experienced at operating an inflation targeting framework, some of the countries refined their frameworks. Ultimately, the survey draws lessons from the common experience of the seven countries assessed. It shows that credibility is key to the success of an inflation targeting framework, as is a supportive context. However, the survey also highlights that simply judging a country’s monetary policy success on whether it achieves its inflation targets is too limited an assessment for justifying the merit of an inflation targeting framework. / Prof. S. Chetty

No description available.

Magister Economicae - MEcon / The transmission mechanism of monetary policy has generated a substantial amount of interest in economic research in many countries, with most studies focusing on how a change in monetary policy stance, usually defined as an exogenous shock in a short-term interest rate, affects the economy at a national level, with changes in output, inflation and exchange rates being the key variables under investigation. This study adopts a similar analysis, with the general objective of examining the effectiveness of monetary policy in Botswana. Specifically, this study aims at finding out how the central bank rate affects inflation in Botswana and the duration of its effects on economic variables in Botswana. The study adopts the recursive VAR methodology, using quarterly data from 1995 quarter one to 2009 quarter four. The results show that monetary policy is most effective via the interest rate channel in Botswana, followed by the credit channel and then the exchange rate channel. In addition, the results reflect that the economy reacts to monetary policy actions with a one period lag, with the effect lasting for seven quarters.

Diploma thesis analyzes the inflation targeting regime. The theoretical part describes the basic mechanism of the regime, which consists of setting the inflation targets and the exceptions when the inflation rate may deviate from the targeted zone. Further part describes production of conditional and unconditional forecasts and operational steering of central bank interest rates. In the theoretical part are also summarized the advantages and disadvantages of the regime. The empirical part of this thesis consists in application of the theoretical findings to the practical experiences of CNB. It describes the process of setting the inflation targets and forecasting procedure of CNB. Final part of the thesis summarizes the successes and failures of practical application of the regime in the Czech Republic.

This thesis is focused on year to date performance of common currency euro. Especialy it's impact on main macroeconomic indicators -- GDP and inflation. Analytical part of this study compairs long-term developement of this indicators in countries, which has adopted euro and those who has not. Objective of this thesis is formulation of conclusions, regarding benefits of euro adoption in light of GDP and inflation.

The goal of this dissertation is to analyze issues that arise when policy makers try to learn about the economy while their policies are affecting it. The dissertation takes the form of three essays. The first essay examines how optimal policy affects equiUbrium economic outcomes in environments in which agents are both imperfectly informed about the state of the economy and able to learn by observing the actions of others. This type of environment, in which there is social learning, has received growing attention, but to date there has been little examination of strategic policy making in such settings. In particular, the question of whether policy, in the absence of a commitment technology, can be designed to increase the speed of information revelation remains open. The essay builds on a real options model of investment and shows how this framework can be extended to derive time consistent policies and the related equilibrium outcomes in social learning environments. By comparing the equilibrium induced by a policy maker to both the laissez-faire outcome and the social optimum, it is shown that the policy maker is able to achieve the second best outcome and reduce delay to the efficient level even in the absence of commitment. The second essay raises the question of whether the fact that policy makers play a dual role, as both information gatherers and economic managers, can explain the flattening of the Phillips Curve relationship between inflation and real activity that has been observed in both Canada and the U.S. over the 1990s. The paper models the central bank as both a provider of liquidity in a world where pre-set prices would otherwise cause potential gains from trade to go unrealized and a gatherer of information about real developments in the economy. The bank's information complements that of private agents so that, the central bank and private agents both wish to learn from the other. In equilibrium, this interaction gives rise to a Phillips curve relationship which both exhibits causality running from real activity to prices and justifies a feedback from prices to the setting of monetary instruments. The model implies that a decline in the slope of the Phillips curve may be a result of improvements in the manner in which central banks gather information about the economy. An investigation of the data for Canada and the U.S. finds support for the model. The third essay attempts a more thorough empirical investigation of the issues raised in the previous chapter. The paper enriches the dynamic aspects of the model to further examine its properties, but focuses mainly on attempting to uncover whether the types of changes to the Phillips curve relationship which had been previously documented in Canada and the U.S. have occurred in other OECD countries. The paper investigates this question using both single country and panel estimation and finds that the phenomenon of a declining slope in the Phillips curve relationship is prevalent in OECD countries throughout the 1980s and 1990s. Finally, the paper attempts to exploit the cross country data to provide more formal tests of the model's predictions regarding policy innovations and inflation targeting regimes. The results suggest that the model compares favourably to other potential explanations of the decline in the slope of the Phillips curve. / Arts, Faculty of / Vancouver School of Economics / Graduate

No description available.

The South African Reserve Bank (SARB) moved to an official inflation targeting regime in the February of 2000, with the sole aim of maintaining the CPIX inflation between a target-band of three to six percent. Against this backdrop, this thesis, over seven independent chapters with a common theme, evaluates the inflation targeting regime in terms of welfare cost estimates and mean and volatility of inflation in the post-targeting period. Chapters 2 and 3 use the partial equilibrium money demand approach based on cointegration and long-horizon estimation techniques, to derive the welfare cost estimates. Given the sensitivity of the results to the estimation techniques, chapter 4 carries out a robustness check for the two estimation methods based on data aggregation. The chapter 4 finds the long-horizon method to be more robust, and shows that the welfare cost estimate lies between 0.15 percent to 0.41 percent of GDP across the width of the target band. Realizing that partial equilibrium approaches are merely one-dimensional, in the sense that it fails to account for the fact that inflation, operating in conjunction with the tax system, has further distortionary effects, we re-evaluate the welfare costs in chapter 5 using a more general micro-level approach. The welfare cost estimates are found to increase by nearly one and half times when compared to the partial equilibrium approaches. This estimate increases by more than twice, when we adopt a dynamic general equilibrium endogenous growth model to calculate the welfare cost of inflation in chapter 6. In chapters 7 and 8 we carry out counterfactual experiments based on a model of dynamic time inconsistency and cosine-squared cepstrum. Specifically, we ask the question: If the mean and volatility of inflation would have been higher or lower had the SARB continued to pursue its pre-targeting monetary policy approach. We find the evidence that the mean and volatility in the post-targeting era is higher than it would have been had the SARB continued to stick to its pre-targeting monetary policy framework. Based on our results, we conclude that there can be large gains by considering a narrower (and possibly lower) target band. / Thesis (PhD)--University of Pretoria, 2010. / Economics / unrestricted

La evidencia empírica señala que altas tasas de inflación funcionan como un impuesto regresivo. La inflación es un impuesto inflacionario que surge para financiar los ingresos del gobierno y genera distorsiones en el sector privado y, puede crear distorsiones en el mismo sistema tributario si este no está indexado a la inflación. Además, genera un mayor y negativo impacto en los más pobres, quienes son la población más vulnerable financieramente ante situaciones con precios elevados. Cualquier intento de reducir la inflación en el presente, se traducirá en la generación de mayor inflación en el futuro, teniendo en cuenta que los bancos centrales no tienen restricciones de préstamos al tesoro. Debido a periodos de altas tasas de inflación que tuvieron un efecto negativo el crecimiento de los países presentando una elevada desigualdad de ingresos, varios autores han enfocado sus investigaciones en analizar el impacto de la política monetaria en la distribución del ingreso, puesto que un choque inflacionario tendrías mayores consecuencias en su economía que en las demás. En línea con lo anterior, el objetivo de este estudio es determinar cómo la inflación afecta a los agentes de acuerdo a sus niveles de activos y cuantificar el efecto de la inflación sobre la distribución de los ingresos. En el estudio realizado para 43 países, en su mayoría países de América Latina, Europa y Asia, para el periodo 2003-2018, luego de revisar estimaciones bajo el Método Generalizado de Momentos (GMM), se obtiene que no existe relación entre la inflación y la redistribución de ingresos. / Empirical evidence indicates that high inflation rates work as a regressive tax. Inflation is an inflationary tax that arises to finance government revenues and generates distortions in the private sector and can create distortions in the same tax system if it is not indexed to inflation. In addition, it generates a greater and negative impact on the poorest, who are the most financially vulnerable population in situations of high prices. Any attempt to reduce inflation in the present will result in the generation of higher inflation in the future. Due to periods of high inflation rates that had a negative effect on the growth of countries presenting a high income inequality, several authors have focused their research on analyzing the impact of monetary policy on income distribution, since an inflationary shock you would have greater consequences in your economy than in the others. In line with the above, the objective of this study is to determine how inflation affects agents according to their asset levels and quantify the effect of inflation on income distribution. In the study carried out for 43 countries, mostly countries in Latin America, Europe and Asia, for the period 2003-2018, after reviewing estimates under the Generalized Method of Moments (GMM), it is obtained that there is no relation between inflation and redistribution of income. / Trabajo de investigación

京都大学 / 0048 / 新制・課程博士 / 博士(理学) / 甲第19499号 / 理博第4159号 / 新制||理||1597(附属図書館) / 32535 / 京都大学大学院理学研究科物理学・宇宙物理学専攻 / (主査)教授 川合 光, 教授 畑 浩之, 教授 田中 貴浩 / 学位規則第4条第1項該当 / Doctor of Science / Kyoto University / DFAM