World Food Prices, the Terms of Trade-Real Exchange Rate Nexus, and Monetary Policy:

How should monetary policy respond to large fluctuations in world food prices? We study this question in an open economy model in which imported food has a larger weight in domestic consumption than abroad and international risk sharing can be imperfect. A key novelty is that the real exchange rate...

Ausführliche Beschreibung

Gespeichert in:
Bibliographische Detailangaben
1. Verfasser: Catão, Luis (VerfasserIn)
Format: Elektronisch E-Book
Sprache:English
Veröffentlicht: Washington, D.C International Monetary Fund 2013
Schriftenreihe:IMF Working Papers Working Paper No. 13/114
Online-Zugang:UBW01
UEI01
LCO01
SBR01
UER01
SBG01
UBG01
FAN01
UBT01
FKE01
UBY01
UBA01
FLA01
UBM01
UPA01
UBR01
FHA01
FNU01
BSB01
TUM01
Volltext
Zusammenfassung:How should monetary policy respond to large fluctuations in world food prices? We study this question in an open economy model in which imported food has a larger weight in domestic consumption than abroad and international risk sharing can be imperfect. A key novelty is that the real exchange rate and the terms of trade can move in opposite directions in response to world food price shocks. This exacerbates the policy trade-off between stabilizing output prices vis a vis the real exchange rate, to an extent that depends on risk sharing and the price elasticity of exports. Under perfect risk sharing, targeting the headline CPI welfare-dominates targeting the PPI if the variance of food price shocks is not too small and the export price elasticity is realistically high. In such a case, however, targeting forecast CPI is a superior choice. With incomplete risk sharing, PPI targeting is clearly a winner
Beschreibung:1 Online-Ressource (64 p)
ISBN:1484371569
9781484371565

Es ist kein Print-Exemplar vorhanden.

Fernleihe Bestellen Achtung: Nicht im THWS-Bestand! Volltext öffnen