Theoretical Notes on Commodity Prices and Monetary Policy
12 Pages Posted: 14 Apr 2013
Date Written: February 1, 2013
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: Suggested Citation