MONETARY POLICY AND INFLATION TARGETING IN A SMALL OPEN ECONOMY
The danger of inflation has been the focus of many central banks. This paper analyzes the transmission mechanism of monetary policy and inflation targeting in Malaysia with a backward-looking aggregate supply and demand analysis. The manage floating regime applied in the country has an important rol...
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| Format: | Article |
| Language: | English |
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Universitas Islam Indonesia
2011-09-01
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| Series: | Economic Journal of Emerging Markets |
| Online Access: | https://www.hmj.accounting.uii.ac.id/JEP/article/view/2305 |
| _version_ | 1818533470596497408 |
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| author | Antoni Antoni |
| author_facet | Antoni Antoni |
| author_sort | Antoni Antoni |
| collection | DOAJ |
| description | The danger of inflation has been the focus of many central banks. This paper analyzes the transmission mechanism of monetary policy and inflation targeting in Malaysia with a backward-looking aggregate supply and demand analysis. The manage floating regime applied in the country has an important role in achieving a stable exchange rate against its major trading partners. It also analyzes the policy of maintaining the soundness of interest rate to perceive inflation targeting to increase its economic growth. Using 1991-2004 data and a traditional structural econometric model, it shows that output gap is important in forecasting a domestic inflation rate by controlling the interest rate.
Keywords: Inflation targeting, monetary economics, structural econometric model
JEL classification numbers: E3, E52
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| first_indexed | 2024-12-11T17:59:08Z |
| format | Article |
| id | doaj.art-9ee46d3b5ba341928752987980877f53 |
| institution | Directory Open Access Journal |
| issn | 2086-3128 2502-180X |
| language | English |
| last_indexed | 2024-12-11T17:59:08Z |
| publishDate | 2011-09-01 |
| publisher | Universitas Islam Indonesia |
| record_format | Article |
| series | Economic Journal of Emerging Markets |
| spelling | doaj.art-9ee46d3b5ba341928752987980877f532022-12-22T00:55:58ZengUniversitas Islam IndonesiaEconomic Journal of Emerging Markets2086-31282502-180X2011-09-0122MONETARY POLICY AND INFLATION TARGETING IN A SMALL OPEN ECONOMYAntoni AntoniThe danger of inflation has been the focus of many central banks. This paper analyzes the transmission mechanism of monetary policy and inflation targeting in Malaysia with a backward-looking aggregate supply and demand analysis. The manage floating regime applied in the country has an important role in achieving a stable exchange rate against its major trading partners. It also analyzes the policy of maintaining the soundness of interest rate to perceive inflation targeting to increase its economic growth. Using 1991-2004 data and a traditional structural econometric model, it shows that output gap is important in forecasting a domestic inflation rate by controlling the interest rate. Keywords: Inflation targeting, monetary economics, structural econometric model JEL classification numbers: E3, E52 https://www.hmj.accounting.uii.ac.id/JEP/article/view/2305 |
| spellingShingle | Antoni Antoni MONETARY POLICY AND INFLATION TARGETING IN A SMALL OPEN ECONOMY Economic Journal of Emerging Markets |
| title | MONETARY POLICY AND INFLATION TARGETING IN A SMALL OPEN ECONOMY |
| title_full | MONETARY POLICY AND INFLATION TARGETING IN A SMALL OPEN ECONOMY |
| title_fullStr | MONETARY POLICY AND INFLATION TARGETING IN A SMALL OPEN ECONOMY |
| title_full_unstemmed | MONETARY POLICY AND INFLATION TARGETING IN A SMALL OPEN ECONOMY |
| title_short | MONETARY POLICY AND INFLATION TARGETING IN A SMALL OPEN ECONOMY |
| title_sort | monetary policy and inflation targeting in a small open economy |
| url | https://www.hmj.accounting.uii.ac.id/JEP/article/view/2305 |
| work_keys_str_mv | AT antoniantoni monetarypolicyandinflationtargetinginasmallopeneconomy |