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A Macro-Model Approach to Monetary Policy Analysis and Forecasting for Vietnam

The paper develops a small New-Keynesian FPAS model for Vietnam. The model closely matches actual data from 2000-2014. We derive an optimal monetary policy rule that minimizes variability of output, inflation, and the exchange rate. Compared to the baseline model, the optimal rule places a larger we...

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Bibliographic Details
Main Author: Dizioli, Allan
Other Authors: Schmittmann, Jochen M.
Format: eBook
Language:English
Published: Washington, D.C. International Monetary Fund 2015
Series:IMF Working Papers
Subjects:
Interest Rates
Inflation
Finance
Output Gap
Monetary Economics
Currency; Foreign Exchange
Financial Services
Inflation Targeting
Real Interest Rates
Deflation
Production
Production; Economic Theory
Macroeconomics: Production
Money And Interest Rates: Forecasting And Simulation
Foreign Exchange
Price Level
Banks And Banking
Prices
Macroeconomics
Monetary Policy
Interest Rates: Determination, Term Structure, And Effects
Exchange Rates
Money And Monetary Policy
Production And Operations Management
Vietnam
Online Access:
Collection: International Monetary Fund - Collection details see MPG.ReNa
Description
Summary:The paper develops a small New-Keynesian FPAS model for Vietnam. The model closely matches actual data from 2000-2014. We derive an optimal monetary policy rule that minimizes variability of output, inflation, and the exchange rate. Compared to the baseline model, the optimal rule places a larger weight on output stabilization as the intermediate target to achieve inflation stability, while allowing greater exchange rate flexibility. We analyze the dynamics of key macro variables under various shocks including external and domestic demand shocks and a lift-off of U.S. interest rates. We find that the optimal monetary policy rule delivers greater macroeconomic stability for Vietnam under the shock scenarios
Physical Description:25 pages
ISBN:9781513595665

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