Measuring Monetary Policy in Open Economies

Cerdeiro, Diego A.

dc.creator	Cerdeiro, Diego A.
dc.date	2012-03-19T18:38:57Z
dc.date	2012-03-19T18:38:57Z
dc.date	2010-03-01
dc.date.accessioned	2023-02-17T21:02:40Z
dc.date.available	2023-02-17T21:02:40Z
dc.identifier	http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20100326084211
dc.identifier	http://hdl.handle.net/10986/3739
dc.identifier.uri	http://localhost:8080/xmlui/handle/CUHPOERS/244703
dc.description	The paper extends Bernanke and Mihov's [6] closed-economy strategy for identification of monetary policy shocks to open-economy settings, accounting for the simultaneity between interest-rate and exchange-rate innovations. The methodology allows a separate treatment of two distinct monetary policy shocks, one that operates through open market operations, and another one that takes place through interventions in the foreign exchange market. Implementation of this strategy to the case of Argentina provides the stylized facts necessary to choose among competing theoretical models of this economy. In addition to studying the effects of monetary policy innovations, the present study sheds light on the endogenous component of monetary policy. In this regard, the paper finds that, notwithstanding the relative stability of the exchange rate and the accumulation of large amounts of international reserves, the central bank in Argentina has been far from absorbing balance of payments shocks in a currency-board fashion. The growing level of international reserves can be rationalized, instead, as the monetary authority's response to terms of trade, supply and domestic currency demand shocks.
dc.language	English
dc.relation	Policy Research working paper ; no. WPS 5252
dc.rights	CC BY 3.0 IGO
dc.rights	http://creativecommons.org/licenses/by/3.0/igo/
dc.rights	World Bank
dc.subject	ABSOLUTE VALUE
dc.subject	ACCOUNTING
dc.subject	ASSETS
dc.subject	AUTOREGRESSION
dc.subject	BALANCE OF PAYMENTS
dc.subject	BALANCE SHEET
dc.subject	BALANCE-OF-PAYMENTS CRISES
dc.subject	BANK BONDS
dc.subject	BONDS
dc.subject	CAPITAL ACCOUNT
dc.subject	CASH BALANCES
dc.subject	CENTRAL BANK
dc.subject	CENTRAL BANK ASSET
dc.subject	CENTRAL BANKS
dc.subject	CHECKING ACCOUNTS
dc.subject	CHECKS
dc.subject	CLOSED ECONOMY
dc.subject	COMMERCIAL BANK
dc.subject	COMMERCIAL BANKS
dc.subject	COMMODITIES
dc.subject	COMMODITY
dc.subject	COMMODITY PRICE
dc.subject	COMMODITY PRICES
dc.subject	CONSUMPTION EXPENDITURES
dc.subject	COVARIANCE MATRICES
dc.subject	COVARIANCE MATRIX
dc.subject	CREDIBILITY
dc.subject	CURRENCY BOARD
dc.subject	CURRENCY CRISES
dc.subject	CURRENCY DEMAND
dc.subject	CURRENCY SUPPLY
dc.subject	CURRENCY TRANSACTION
dc.subject	CURRENT ACCOUNT
dc.subject	CURRENT ACCOUNT DEFICIT
dc.subject	CURRENT ACCOUNT SHOCK
dc.subject	CURRENT ACCOUNT SHOCKS
dc.subject	CURRENT ACCOUNT SURPLUS
dc.subject	DEPENDENT VARIABLE
dc.subject	DEPOSIT
dc.subject	DEPRECIATION
dc.subject	DEPRECIATION RATE
dc.subject	DISCOUNT RATE
dc.subject	DOLLAR VALUE
dc.subject	DOMESTIC CURRENCIES
dc.subject	DOMESTIC CURRENCY
dc.subject	DOMESTIC FINANCIAL INSTITUTIONS
dc.subject	DOMESTIC INTEREST RATE
dc.subject	DOMESTIC INTEREST RATES
dc.subject	DOMESTIC LIQUIDITY
dc.subject	DOMESTIC PRICES
dc.subject	ECONOMETRICS
dc.subject	ECONOMIC CONDITIONS
dc.subject	ECONOMIC POLICY
dc.subject	ECONOMIC RESEARCH
dc.subject	ECONOMIC THEORY
dc.subject	ENDOGENOUS VARIABLES
dc.subject	EQUATIONS
dc.subject	EQUILIBRIUM CONDITION
dc.subject	EQUILIBRIUM CONDITIONS
dc.subject	ERROR TERMS
dc.subject	EXCESS DEMAND
dc.subject	EXCESS LIQUIDITY
dc.subject	EXCESS SUPPLY
dc.subject	EXCHANGE RATE
dc.subject	EXCHANGE RATE APPRECIATION
dc.subject	EXCHANGE RATE SHOCKS
dc.subject	EXCHANGE RATES
dc.subject	EXCHANGE TRANSACTIONS
dc.subject	EXCHANGE-RATE
dc.subject	EXOGENOUS VARIABLES
dc.subject	EXPORTS
dc.subject	EXTERNAL POSITION
dc.subject	FEDERAL RESERVE
dc.subject	FEDERAL RESERVE BANK
dc.subject	FINANCIAL SYSTEM
dc.subject	FISCAL POLICY
dc.subject	FISCAL SHOCKS
dc.subject	FIXED EXCHANGE RATE
dc.subject	FLEXIBLE EXCHANGE RATES
dc.subject	FOREIGN ASSETS
dc.subject	FOREIGN CURRENCY
dc.subject	FOREIGN DIRECT INVESTORS
dc.subject	FOREIGN EXCHANGE
dc.subject	FOREIGN EXCHANGE MARKET
dc.subject	FOREIGN EXCHANGE MARKET INTERVENTION
dc.subject	FOREIGN EXCHANGE MARKETS
dc.subject	FOREIGN INTEREST
dc.subject	FOREIGN INTEREST RATES
dc.subject	GDP
dc.subject	GDP DEFLATOR
dc.subject	GENERAL EQUILIBRIUM
dc.subject	GENERAL EQUILIBRIUM MODELS
dc.subject	GROSS DOMESTIC PRODUCT
dc.subject	HOLDINGS
dc.subject	IMPORTS
dc.subject	INCOME
dc.subject	INDUSTRIAL COUNTRIES
dc.subject	INFLATION
dc.subject	INFLATION RATE
dc.subject	INSTRUMENT
dc.subject	INTEREST PARITY
dc.subject	INTEREST RATE
dc.subject	INTEREST-RATE
dc.subject	INTERNATIONAL BANK
dc.subject	INTERNATIONAL ECONOMICS
dc.subject	INTERNATIONAL ECONOMIES
dc.subject	INTERNATIONAL RESERVES
dc.subject	INTERPOLATION
dc.subject	LENDERS
dc.subject	LIABILITY
dc.subject	LIQUIDITY
dc.subject	LOCAL CURRENCY
dc.subject	MACROECONOMIC MODELS
dc.subject	MACROECONOMICS
dc.subject	MARKET CONDITIONS
dc.subject	MONETARY AGGREGATES
dc.subject	MONETARY AUTHORITIES
dc.subject	MONETARY AUTHORITY
dc.subject	MONETARY CONDITIONS
dc.subject	MONETARY ECONOMICS
dc.subject	MONETARY POLICIES
dc.subject	MONETARY POLICY
dc.subject	MONETARY TARGET
dc.subject	MONETARY TRANSMISSION
dc.subject	MONEY DEMAND
dc.subject	MONEY SUPPLY
dc.subject	MONIES
dc.subject	NOMINAL INTEREST RATES
dc.subject	OIL PRICE
dc.subject	OPEN ECONOMIES
dc.subject	OPEN ECONOMY
dc.subject	OPEN MARKET
dc.subject	OPEN MARKET OPERATION
dc.subject	OPEN MARKET OPERATIONS
dc.subject	OUTPUT
dc.subject	POLICY ON EXCHANGE RATES
dc.subject	POLITICAL ECONOMY
dc.subject	PORTFOLIO
dc.subject	PORTFOLIOS
dc.subject	PRICE INDEX
dc.subject	RANDOM WALK
dc.subject	RATE OF GROWTH
dc.subject	REAL GROSS DOMESTIC PRODUCT
dc.subject	REAL INTEREST
dc.subject	REAL INTEREST RATE
dc.subject	REJECTION
dc.subject	REPOS
dc.subject	RESPONSE TO SHOCKS
dc.subject	SHORT-TERM INTEREST RATE
dc.subject	SHORT-TERM INTEREST RATES
dc.subject	SLOWDOWN
dc.subject	STOCKS
dc.subject	STRUCTURAL SHOCK
dc.subject	STRUCTURAL SHOCKS
dc.subject	SUPPLY SHOCK
dc.subject	SUPPLY SHOCKS
dc.subject	TIGHT MONETARY POLICY
dc.subject	TOTAL RESERVES
dc.subject	TRADE BALANCE
dc.subject	TRADE DATA
dc.subject	TRADE GROWTH
dc.subject	TRADE SHOCK
dc.subject	TRADE SHOCKS
dc.subject	TRANSMISSION MECHANISM
dc.subject	TREASURY
dc.subject	UNANTICIPATED DEPRECIATION
dc.subject	UNCERTAINTY
dc.subject	VOLATILITY
dc.subject	WORLD INTEREST RATES
dc.title	Measuring Monetary Policy in Open Economies
dc.type	Publications & Research :: Policy Research Working Paper
dc.coverage	Latin America & Caribbean
dc.coverage	Latin America & Caribbean