研讨論文

Incomplete financial markets, food price, and monetary policy in developing countries

論文作者

Liutang Gong, Jianjian Liu, Chan Wang, Liyuan Wu, Heng-fu Zou

主講人

王忏

時間

2022年

12月10日 18:30-21:30

地點

370-857-261（騰訊會議）

點評老師

王忏、明洋

活動對象

韦德体育bevictor研究生

論文摘要

In a small open developing economy model with incomplete financial markets and a subsistence level of food consumption, headline inflation targeting performs better in terms of stabilizing the economy, thus generating welfare gains relative to core inflation targeting.

By incorporating the input-output linkages between sectors and endogenous capital accumulation, we reexamine this result and conclude that, compared with headline inflation targeting, core inflation targeting is more successful in stabilizing the economy, thereby improving welfare outcomes. The main reason is that the spillover effect produced through the input-output linkages between sectors, together with endogenous capital accumulation, amplify the depressing effect of the higher interest rate present under headline inflation targeting regime. By contrast, a slight increase in the interest rate under core inflation targeting regime is more helpful in stabilizing the economy.