Announced Regime Switch: Optimal Policy for Transition Period

CERGE-EI Working Paper Series No. 402

54 Pages Posted: 13 Jan 2010

See all articles by František Brázdik

František Brázdik

Czech National Bank; Charles University in Prague - CERGE-EI (Center for Economic Research and Graduate Education - Economics Institute)

Date Written: December 1, 2009

Abstract

The novelty of this work is the presentation of the theoretical framework that allows to model announced change of the monetary regime. I analyze behavior of small open economy that announced to adopt a monetary policy regime with focus on offsetting nominal exchange rate changes in given number of periods. First, I analyze effects for macroeconomic stability of choice of the monetary regime for transition period. For this analysis, I consider representative types of monetary regimes in the announcement change period. I also try to rank the examined regimes in terms of loss functions. Moreover, I try to analyze the evolution of business cycles synchronization over the transition.

Keywords: New Keynesian Models, Small Open Economy, Monetary regime change

JEL Classification: E17, E31, E52, E58, E61, F02, F41

Suggested Citation

Brázdik, František, Announced Regime Switch: Optimal Policy for Transition Period (December 1, 2009). CERGE-EI Working Paper Series No. 402. Available at SSRN: https://ssrn.com/abstract=1535677 or http://dx.doi.org/10.2139/ssrn.1535677

František Brázdik (Contact Author)

Czech National Bank ( email )

Na Prikope 28
CZ-11503 Praha 1
Czech Republic

Charles University in Prague - CERGE-EI (Center for Economic Research and Graduate Education - Economics Institute) ( email )

P.O. Box 882
7 Politickych veznu
Prague 1, 111 21
Czech Republic

HOME PAGE: http://www.cerge-ei.cz

Register to save articles to
your library

Register

Paper statistics

Downloads
11
Abstract Views
221
PlumX Metrics