Singapore: Selected Issues
July 29, 2016
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This Selected Issues paper develops a new calibrated model of the Singapore economy, the Singapore Global Policy MODel (SGPMOD), and uses it to conduct a variety of policy experiments focused on the conduct of monetary policy. The SGPMOD is used to illustrate the role of the monetary policy responses of Singapore’s monetary authority following a variety of domestic and external shocks. It is suggested that monetary policy can do little to prevent the trough in real GDP in late 2016, but it can definitely contribute to a speedier recovery. In the near term, there is general global turbulence in exchange rate markets, exacerbating the negative effects from Singapore’s transmission mechanism and its reliance on the uncovered interest parity condition.
Subject: Exchange rates, Financial services, Foreign exchange, Inflation, Output gap, Potential output, Prices, Production, Short term interest rates
Keywords: Asia and Pacific, core inflation, CR, exchange rate, Exchange rates, Global, Inflation, interest rate, ISCR, MAS monetary policy response, monetary policy, Output gap, Potential output, reaction function, Short term interest rates, Singapore economy, target NEER, transmission mechanism
Pages:
43
Volume:
2016
DOI:
Issue:
264
Series:
Country Report No. 2016/264
Stock No:
1SGPEA2016002
ISBN:
9781475521085
ISSN:
1934-7685
