Theoretical Notes on Commodity Prices and Monetary Policy

12 Pages Posted: 14 Apr 2013

See all articles by Paolo A. Pesenti

Paolo A. Pesenti

Federal Reserve Bank of New York; National Bureau of Economic Research (NBER)

Date Written: February 1, 2013

Abstract

These notes provide a non-technical introduction to recent models of monetary policy response to commodity price shocks, with emphasis on the choice between targeting the headline consumer price index vs. a measure of core prices, and the reaction to global sources of inflation when inflexible exchange rate regimes represent a source of distortion in world commodity markets.

Full publication: Globalisation and Inflation Dynamics in Asia and the Pacific

Keywords: commodity prices, core and headline inflation, monetary policy

JEL Classification: F42, E52

Suggested Citation

Pesenti, Paolo A., Theoretical Notes on Commodity Prices and Monetary Policy (February 1, 2013). BIS Paper No. 70i. Available at SSRN: https://ssrn.com/abstract=2249694

Paolo A. Pesenti (Contact Author)

Federal Reserve Bank of New York ( email )

33 Liberty Street
New York, NY 10045
United States
212-720-5493 (Phone)
212-720-6831 (Fax)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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