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

Mustafa Caglayan, Zainab Jehan, Kostas Mouratidis

    Research output: Contribution to journalArticlepeer-review

    12 Citations (Scopus)

    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.

    Original languageEnglish
    Pages (from-to)279–293
    Number of pages15
    JournalInternational Journal of Finance and Economics
    Volume21
    Issue number3
    Early online date17 Feb 2016
    DOIs
    Publication statusPublished - Jul 2016

    Keywords

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

    ASJC Scopus subject areas

    • Finance
    • Accounting
    • Economics and Econometrics

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