Asymmetric Monetary Policy Rules for an Open Economy: Evidence from Canada and the Uk

Mustafa Caglayan, Zainab Jehan, Kostas Mouratidis

Research output: Contribution to journalArticle

Abstract

We present an analytical framework to examine the open economy monetary policy rule of a central bank under asymmetric preferences. The resulting policy rule is then empirically examined using quarterly data with regard to Canada and the UK from 1983q1 to 2007q4. Our empirical investigation shows that the open economy policy rule receives support from the data and that the monetary policy makers in the UK and Canada have asymmetric preferences. Robustness checks based on model calibration provide support for the suggested policy rule.

LanguageEnglish
Pages279–293
Number of pages15
JournalInternational Journal of Finance and Economics
Volume21
Issue number3
Early online date17 Feb 2016
DOIs
StatePublished - Jul 2016

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Monetary policy rules
Open economy
Canada
Policy rules
Asymmetric preferences
Politicians
Monetary policy
Central bank
Model calibration
Empirical investigation
Robustness

Keywords

  • Asymmetric preferences
  • Calibration
  • Econometrics
  • Monetary policy rules
  • Open economy

Cite this

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Asymmetric Monetary Policy Rules for an Open Economy : Evidence from Canada and the Uk. / Caglayan, Mustafa; Jehan, Zainab; Mouratidis, Kostas.

In: International Journal of Finance and Economics, Vol. 21, No. 3, 07.2016, p. 279–293.

Research output: Contribution to journalArticle

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