A Tale of Two Regimes: Classifying and Revisiting the Monetary Policy Regimes

Wong, Kin Ming and Chong, Terence Tai Leung (2014): A Tale of Two Regimes: Classifying and Revisiting the Monetary Policy Regimes.

Abstract

The existing literature on the performance of monetary policy regimes is separate and isolated, with unidentified monetary policy framework for floating rate regime in the exchange rate regime literature and non-inflation targeting regime in the inflation targeting literature. This paper proposes a comprehensive de facto classification of monetary policy regimes based on the behavior of economic variables. The result reveals a non-negligible number of “hidden inflation targeters”, which use inflation targeting monetary policy in the absence of formally announced inflation targets. Based on the classification result, we also document monetary history and stylized facts that are highly consistent to our conventional understandings.

• Item Type: MPRA Paper
• Language: English
• Keywords: Monetary Policy Regimes; Inflation Targeting; Exchange-rate Targeting
• Subjects: E - Macroeconomics and Monetary Economics > E4 - Money and Interest Rates > E42 - Monetary Systems ; Standards ; Regimes ; Government and the Monetary System ; Payment Systems; E - Macroeconomics and Monetary Economics > E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit > E52 - Monetary Policy; E - Macroeconomics and Monetary Economics > E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit > E58 - Central Banks and Their Policies

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