The purpose of this paper is to deal with the dynamics of a Neo‐Keynesian model applied to a small open economy, in order to show the impact of commercial openness on the choice of the optimal inflation target.
The author uses a neo‐Keynesian model with calibration for Chile.
The results show that there is a relation between the degree of openness and the type of inflation targeting policy.
The originality of the paper is to use a neo‐Keynesian model to deal with a small open economy, which uses inflation targeting as a monetary rule.
Bousrih, J. (2012), "Degree of openness and inflation targeting policy: model of a small open economy", Journal of Financial Economic Policy, Vol. 4 No. 3, pp. 232-246. https://doi.org/10.1108/17576381211245962Download as .RIS
Emerald Group Publishing Limited
Copyright © 2012, Emerald Group Publishing Limited