A Macro-Model Approach to Monetary Policy Analysis and Forecasting for Vietnam
IMF Working Papers, December 23, 2015
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- A Macro-Model Approach to Monetary Policy Analysis and Forecasting for Vietnam
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Bibliographic details
- Authors: Allan Dizioli, Jochen M. Schmittmann
- Published: December 23, 2015
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781513595665.001
Overview and model specification
- Paper develops a small New-Keynesian FPAS model for Vietnam.
- Model period and fit:
- Model closely matches actual data from 2000-2014.
- Authors and publication:
- By Allan Dizioli, Jochen M. Schmittmann
- December 23, 2015
- Pages: 25
- Volume: 2015
- Issue: 273
- Series: Working Paper No. 2015/273
- DOI: https://doi.org/10.5089/9781513595665.001
- Stock No: WPIEA2015273
- ISBN: 9781513595665
- ISSN: 1018-5941
Optimal monetary policy rule: objectives and characteristics
- Objective function and targets:
- Derives an optimal monetary policy rule that minimizes variability of output, inflation, and the exchange rate.
- Key finding on intermediate target:
- Compared to the baseline model, the optimal rule places a larger weight on output stabilization as the intermediate target to achieve inflation stability.
- Exchange rate stance:
- The optimal rule allows greater exchange rate flexibility relative to the baseline.
Shock analysis and scenarios
- Types of shocks analyzed:
- External demand shocks
- Domestic demand shocks
- A lift-off of U.S. interest rates
- Dynamics examined:
- Analyzes the dynamics of key macro variables under the above shock scenarios.
Main findings and implications
- Stability outcomes:
- The optimal monetary policy rule delivers greater macroeconomic stability for Vietnam under the shock scenarios considered.
- Policy emphasis:
- Emphasizes using output stabilization as an intermediate target to secure inflation stability while tolerating more exchange rate flexibility.
Technical and topical scope
- Subjects covered:
- Exchange rates, Financial services, Foreign exchange, Inflation, Inflation targeting, Monetary policy, Output gap, Prices, Production, Real interest rates
- Keywords (selected):
- Bayesian Estimation, demand shock, Exchange rates, food inflation Phillips Curve, fuel inflation, Global, Inflation, inflation stability, Inflation Targeting, Monetary Policy, monetary policy rule, nominal exchange rate, nominal interest rate, Output gap, Real interest rates, WP
IMF Working Paper — A Macro-Model Approach to Monetary Policy Analysis and Forecasting for Vietnam (Working Paper No. 2015/273) by Allan Dizioli and Jochen M. Schmittmann, December 23, 2015.
Content in this bundle
- Microsoft Word - IMF WP FPAS Vietnam_final_v2.docx