06942oam 22013094 450 991096062770332120250426110858.0978661284244397814623093681462309364978145271173714527117399781451871692145187169497812828424411282842447(CKB)3170000000055183(EBL)1608141(SSID)ssj0000942129(PQKBManifestationID)11543355(PQKBTitleCode)TC0000942129(PQKBWorkID)10971846(PQKB)10921618(OCoLC)465418354(IMF)WPIEE2009022(MiAaPQ)EBC1608141(IMF)WPIEA2009022WPIEA2009022(EXLCZ)99317000000005518320020129d2009 uf 0engur|n|---|||||txtccr“Monetary and Fiscal Rules in an Emerging Small Open Economy” /Paul Levine, Joseph Pearlman, Nicoletta Batini1st ed.Washington, D.C. :International Monetary Fund,2009.1 online resource (80 p.)IMF Working PapersDescription based upon print version of record.9781451916058 1451916051 Includes bibliographical references.Contents; I. Introduction; II. The Model; A. Households; B. Firms; C. The Government Budget Constraint and Foreign Asset Accumulation; D. The Equilibrium; E. Specialization of the Household's Utility Function; F. State Space Representation; G. The Small Open Economy; H. Calibration; III. Monetary Policy Interest Rate Rules; IV. Fiscal Rules; A. A Conventional Fiscal Rule; B. The Structural Fiscal Surplus Rule; V. Imposing the Nominal Interest Rate Zero Lower Bound; VI. Optimal Monetary and Fiscal Policy with Financial Frictions; A. Imposing the ZLB; Figures; 1. Imposition of ZLB: Model I2. Imposition of ZLB: Model IIIB. Welfare Decomposition; C. Impulse Responses; 3. Impulse Responses to a-1 Percent Technology Shock. Models I, II, and III; VII. The Performance of Optimized Simple Rules; 4. Imposition of ZLB: Flex(D)+Conventional Fiscal Rule, Model I; 5. Imposition of ZLB: Flex(D)+Conventional Fiscal Rule: Model III; VIII. Conclusions; Tables; 1. Notation for Prices; 2. Welfare Outcomes Under Optimal Policy: No ZLB Constraint; 3. Optimal Policy with a ZLB Constraint: Monetary Policy Only for Model I4. Optimal Commitment with a ZLB Constraint. Monetary Plus Fiscal Policy for Model I5. Welfare Outcomes Under Optimal Policy: ZLB Constraint; 6. Welfare Decomposition of Shocks; 7. Welfare Outcomes Under Optimized Simple Rules: FLEX (D) with a Conventional Fiscal Rule. Models I, II and III; 8. Welfare Outcomes Under Optimized Simple Rules: FIX with a Conventional Fiscal Rule. Models I, II and III; 9. Welfare Outcomes Under Optimized Simple Rules: FLEX(C) with a Conventional Fiscal Rule. Models I, II and III10. Welfare Outcomes Under Optimized Simple Rules: FLEX(D) with a Modified SFSR. Models I, II and IIIAppendixes; 1. The Steady State; 2. Linearization; 3. Calibration and Estimation; 4. Quadratic Approximation of the Welfare LossWe develop a optimal rules-based interpretation of the 'three pillars macroeconomic policy framework': a combination of a freely floating exchange rate, an explicit target for inflation, and a mechanism than ensures a stable government debt-GDP ratio around a specified long run. We show how such monetary-fiscal rules need to be adjusted to accommodate specific features of emerging market economies. The model takes the form of two-blocs, a DSGE emerging small open economy interacting with the rest of the world and features, in particular, financial frictions It is calibrated using Chile and US data. Alongside the optimal Ramsey policy benchmark, we model the three pillars as simple monetary and fiscal rules including and both domestic and CPI inflation targeting interest rate rules alongside a 'Structural Surplus Fiscal Rule' as followed recently in Chile. A comparison with a fixed exchange rate regime is made. We find that domestic inflation targeting is superior to partially or implicitly (through a CPI inflation target) or fully attempting to stabilizing the exchange rate. Financial frictions require fiscal policy to play a bigger role and lead to an increase in the costs associated with simple rules as opposed to the fully optimal policy.IMF Working Papers; Working Paper ;No. 2009/022Monetary policyDeveloping countriesFiscal policyDeveloping countriesBanks and BankingimfConsumptionimfCurrenciesimfEconomicsimfFinanceimfFiscal PolicyimfFiscal policyimfFiscal rulesimfGovernment and the Monetary SystemimfInterest ratesimfInterest Rates: Determination, Term Structure, and EffectsimfMacroeconomicsimfMacroeconomics: ConsumptionimfMonetary economicsimfMonetary SystemsimfMoney and Monetary PolicyimfMoneyimfPayment SystemsimfPublic FinanceimfRegimesimfSavingimfStandardsimfWealthimfZero lower boundimfChileimfMonetary policyFiscal policyBanks and BankingConsumptionCurrenciesEconomicsFinanceFiscal PolicyFiscal policyFiscal rulesGovernment and the Monetary SystemInterest ratesInterest Rates: Determination, Term Structure, and EffectsMacroeconomicsMacroeconomics: ConsumptionMonetary economicsMonetary SystemsMoney and Monetary PolicyMoneyPayment SystemsPublic FinanceRegimesSavingStandardsWealthZero lower bound332.4;332.41Levine Paul127428Batini Nicoletta1815833Pearlman Joseph1815991DcWaIMFBOOK9910960627703321“Monetary and Fiscal Rules in an Emerging Small Open Economy”4371628UNINA