Can a Rule-Based Monetary Policy Framework Work in a Developing Country? The Case of Yemen.
Selim. Elekdag
Bok Engelsk 2007 · Electronic books.
| Utgitt | International Monetary Fund
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|---|---|
| Omfang | 1 online resource (30 pages)
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| Utgave | 1st ed.
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| Opplysninger | Intro -- Contents -- I. Introduction -- II. Key Considerations in Designing a Monetary Policy Framework for Yemen -- A. Instability of Money Demand -- B. Maintaining a Flexible Exchange Rate Regime -- C. Exchange Rate Pass-through to Inflation -- III. An Alternative Monetary Policy Framework -- A. General Considerations -- B. Instruments and Operating Targets -- C. Monetary Policy Rule -- IV. Forward-Looking Approach and the Need to Forecast Inflation -- A. Forecasting Techniques -- V. Concluding Remarks -- Bibliography -- Figures -- 1. Overall and Core Inflation, January 2000-July 2006 -- Appendixes -- I. Instability of Money Demand in Yemen -- II. Evidence of Exchange Rate-Inflation Pass-Through in Yemen -- III. Inflation Forecasting Techniques for Yemen.. - Monetary policy in Yemen is largely rudimentary and ad hoc in nature. The Central Bank of Yemen's (CBY) approach has been based on discretionary targeting of broad money without any clear target to anchor inflation expectations. This paper argues in favor of a new formal monetary policy framework for Yemen emphasizing a proactive and rule-based approach with a greater direct focus on price stability in the context of a flexible management of the exchange rate. Although, as in many developing countries, institutional capacity is a concern, adopting a more formal framework could impel the kind of changes that are required to strengthen the ability of the CBY in achieving low and stable rates of inflation over the medium term.
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| Emner | |
| Sjanger | |
| Dewey | |
| ISBN | 1452755175. - 9781452755175
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