know, don't know, and can't tell about monetary policy making in an open economy with an (implicit) inflation target. Among … estimates of forward looking Taylor rules; the relationship between inflation targeting and leaning against the (exchange rate …

10-15%, inflation volatility by about 0-15% and interest rate volatility by about 15-40% … assumptions, interest rates can be adjusted to smooth real exchange rate movements at the possible price of increased volatility … accomplish suggest that decreasing real exchange rate volatility by about 25% would require increasing output volatility by about …

inflation (with base drift in the price level) and price-level stability (without such base drift) are compared, and a suitable … loss function (corresponding to flexible inflation targeting) is discussed, including the index and level for the inflation … price stability. The benefits of credibility (private inflation expectations coinciding with the inflation target) are …

linking interest rates to forecasts of future inflation. Such rules have been found to give rise to aggregate fluctuations due … interest-rate rules whereby the central bank responds to a measure of past inflation. The consensus view that has emerged is … inflation are likely to ensure global stability provided that the coefficient on lagged interest rates is greater than unity …

rates, and the shift in the response of the term structure of interest rates to inflation and output. Although the theory …This paper shows that the theory of monetary policy rules is able to explain, predict, and help understand a variety of …

long-run target for the policy rate; and (ii) the central bank is averse to bond-market volatility. In this setting … when the central bank moves more gradually. The same desire to mitigate bond-market volatility can lead the central bank to …