An Announced Regime Switch: Optimal Policy for the Transition Period
Finance a uver - Czech Journal of Economics and Finance; Volume (Year): 61 (2011) Issue (Month): 5 (November) Pages: 411-431
21 Pages Posted: 8 Jun 2013
Date Written: November 11, 2011
The novelty of this article is its theoretical framework, which allows for modeling of an announced change in the type of monetary regime operated. The behavior of a small open economy that has announced the adoption of a monetary policy regime of offsetting nominal exchange rate changes is analyzed. The optimal monetary regime for the transition period and its effects on macroeconomic stability are studied. Moreover, the evolution of business cycle synchronization over the transition is analyzed.
Suggested Citation: Suggested Citation