Monetary Policy and Inflation Dynamics in ASEAN Economies

IMF Working Papers, June 21, 2018

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Investigates the evolution of inflation dynamics in the five largest ASEAN countries between 1997 and 2017.
Analysis accounts for changes in monetary policy frameworks since the Asian Financial Crisis (AFC).
Paper finds evidence of a higher degree of forward-looking dynamics and a better anchoring of inflation expectations, consistent with improvements in monetary policy frameworks in the region.
The quantitative impact of cyclical fluctuations and import prices has gradually diminished over time.

Analysis is based on country-specific Phillips curves allowing for time-varying parameters.
Focuses on how monetary policy framework changes affect inflation dynamics and the role of import prices and cyclical fluctuations.

Evidence of a higher degree of forward-looking dynamics in inflation behavior.
Better anchoring of inflation expectations across the five largest ASEAN countries.
Gradual diminution over time in the quantitative impact of:
- cyclical fluctuations, and
- import prices.

Subject: Import prices, Inflation, Inflation targeting, Monetary policy, Monetary policy frameworks, Oil prices, Prices
Keywords: ASEAN countries, Global, import inflation, Import prices, Inflation, inflation dynamics, inflation expectation, inflation expectations, Inflation targeting, monetary policy, Monetary policy frameworks, Oil prices, Phillips curve, price inflation, trend inflation estimate, WP

IMF Working Papers — "Monetary Policy and Inflation Dynamics in ASEAN Economies", Geraldine Dany-Knedlik and Juan Angel Garcia, June 21, 2018.

Monetary Policy and Inflation Dynamics, WP/18/147, June 2018
- Monetary Policy and Inflation Dynamics, WP/18/147, June 2018 (Markdown version)
- Monetary Policy and Inflation Dynamics, WP/18/147, June 2018 (PDF)