Alternative targets in optimal monetary policy rules in an open economy

• Main Authors: Chen, Qin, Dai, Chenyuan, Xia, Bingxing
• Other Authors: Chia Wai Mun
• Format: Final Year Project
• Language: English
• Published: 2010
• Subjects: DRNTU::Social sciences::Economic theory::International trade
• Online Access: http://hdl.handle.net/10356/39439
• Institution: Nanyang Technological University

This report examines the optimal monetary policy rules in a two-country DSGE model with real and nominal rigidities. The model is solved by simulation in discrete time and the optimal rule is selected as the one giving highest utility. We find that (1) targeting wage inflation always delivers welfar...