Does wage-inflation targeting complement foreign exchange intervention? An evaluation of a multi-target, two-instrument monetary policy framework

• Main Authors: XIE, Taojun, LIU, Jingting, ALBA, Joseph D., CHIA, Wai-Mun
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2017
• Subjects: DSGE model; Emerging markets; Foreign exchange interventions; Sterilization; Taylor rule; Wage inflation targeting; Finance; Finance and Financial Management; Industrial Organization; Labor Economics
• Online Access: https://ink.library.smu.edu.sg/lkcsb_research/5341; https://ink.library.smu.edu.sg/context/lkcsb_research/article/6340/viewcontent/Alba_Joseph.pdf
• Institution: Singapore Management University

We assess the inclusion of wage inflation as an intermediate target of an emerging central bank using a dynamic stochastic general equilibrium model with sticky wages and prices calibrated for the South Korean economy. The model includes wage inflation as an additional target jointly with domestic p...