Estimating a Monetary Policy Reaction Function for the Dominican Republic
Studies in Economics from School of Economics, University of Kent
This paper specifies and estimates a hybrid monetary policy base reaction function for the Dominican Republic (DR). The estimated reactions suggest that the Central Bank has been biased towards targeting the gap between the parallel and official exchange rates, apparently doing so in a more systematic fashion after the mid 1980s. Remarkably, these findings are in line with the Central Bank's long-standing endorsement of a multiple exchange rate regime, and could imply a process of learning, given the monetary authorities' preferences.
Keywords: monetary policy base reaction function; multiple exchange rates market; dynamic modelling; Dominican Republic (search for similar items in EconPapers)
JEL-codes: E52 E58 F41 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ifn, nep-mon and nep-pke
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Journal Article: Estimating a monetary policy reaction function for the dominican republic (2005)
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Persistent link: https://EconPapers.repec.org/RePEc:ukc:ukcedp:0201
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