 Inflation Targeting Lite' in Small Open Economies: The Case of MauritiusInternational Monetary Fund No 2005/172, IMF Working Papers from International Monetary Fund Abstract: This paper develops a new macrofinance model for small open economies, allowing the investigation of Mauritius's experience with 'inflation targeting lite' as described in Stone (2003). It finds that this monetary policy regime has been associated with a general reduction in inflation, principally through a reduction in inflation expectations. The credibility the Bank of Mauritius has established with its 'inflation targeting lite' regime has allowed it to shift from an emphasis on exchange rate targeting towards inflation targeting. By estimating a model in which the yield curve is modeled explicitly we are able to obtain estimates of inflation expectations. Keywords: WP; exchange rate; open economy; inflation targeting; small open economies; managed exchange rates; monetary policy rule; a number of monetary policy challenge; inflation expectation; high-frequency inflation report; BOM's monetary policy choice; objectives of the BOM; inflation-forecasting methodology; managed float; monetary policy setting; BOM's monetary policy rule; monetary policy objective; B. inflation targeting lite framework; Inflation; Real exchange rates; Yield curve; Exchange rates; Global (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:imf:imfwpa:2005/172 Ordering information: This working paper can be ordered from Access Statistics for this paper More papers in IMF Working Papers from International Monetary Fund International Monetary Fund, Washington, DC USA. Contact information at EDIRC. |
Is your work missing from RePEc? Here is how to contribute.
Questions or problems? Check the EconPapers FAQ or send mail to .
EconPapers is hosted by the
School of Business at Örebro University.