'Inflation Targeting Lite' in Small Open Economies: The Case of Mauritius

 
Author/Editor: Yao, James Y. ; Porter, Nathaniel John ; International Monetary Fund. African Dept. ; International Monetary Fund. Finance Dept.
 
Publication Date: September 01, 2005
 
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Summary: 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.
 
Series: Working Paper No. 05/172
Subject(s): Economic models | Exchange rate management | Exchange rate regimes | Inflation targeting | Mauritius

Author's Keyword(s): Inflation targeting | small open economies | managed exchange rates
 
English
Publication Date: September 01, 2005
ISBN/ISSN: 1934-7073 Format: Paper
Stock No: WPIEA2005172 Pages: 25
Price:
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