EconPapers    
Economics at your fingertips  
 

UNCOVERING THE HIT-LIST FOR SMALL INFLATION TARGETERS: A BAYESIAN STRUCTURAL ANALYSIS

Timothy Kam, Kirdan Lees and Philip Liu ()

ANU Working Papers in Economics and Econometrics from Australian National University, College of Business and Economics, School of Economics

Abstract: We estimate underlying macroeconomic policy objectives of three of the earliest explicit inflation targeters - Australia, Canada and New Zealand - within the context of a small open economy DSGE model. We assume central banks set policy optimally, such that we can reverse engineer policy objectives from observed time series data. We find that none of the central banks show a concern for stabilizing the real exchange rate. All three central banks share a concern for minimizing the volatility in the change in the nominal interest rate. The Reserve Bank of Australia places the most weight on minimizing the deviation of output from trend. Joint tests of the posterior distributions of these policy preference parameters suggest that the central banks are very similar in their overall objective.

JEL-codes: C51 E52 F41 (search for similar items in EconPapers)
Pages: 34 pages
Date: 2006-09
New Economics Papers: this item is included in nep-cba, nep-mac and nep-mon
References: Add references at CitEc
Citations: View citations in EconPapers (14)

Downloads: (external link)
https://www.cbe.anu.edu.au/researchpapers/econ/wp473.pdf (application/pdf)

Related works:
Journal Article: Uncovering the Hit List for Small Inflation Targeters: A Bayesian Structural Analysis (2009)
Journal Article: Uncovering the Hit List for Small Inflation Targeters: A Bayesian Structural Analysis (2009) Downloads
Working Paper: Uncovering the Hit-list for Small Inflation Targeters: A Bayesian Structural Analysis (2006) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:acb:cbeeco:2006-473

Access Statistics for this paper

More papers in ANU Working Papers in Economics and Econometrics from Australian National University, College of Business and Economics, School of Economics Contact information at EDIRC.
Bibliographic data for series maintained by ().

 
Page updated 2025-03-22
Handle: RePEc:acb:cbeeco:2006-473