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A Welfare Evaluation of East Asian Monetary Policy Regimes under Foreign Output Shock

dc.contributor.authorJoseph D. Alba
dc.contributor.authorWai-Mun Chia
dc.contributor.authorDonghyun Park
dc.date.accessioned2015-01-24T13:14:17Z
dc.date.available2015-01-24T13:14:17Z
dc.date.issued2012-02-01
dc.identifier.issn1655-5252
dc.identifier.urihttp://hdl.handle.net/11540/1593
dc.description.abstract"Adverse foreign output shocks have a sizable impact on the welfare of small open economies. Therefore, one of the key roles of monetary policy in those economies is to minimize the welfare losses arising from such shocks. To assess the welfare impact of external shocks under different monetary policy regimes, we numerically solve and calculate the welfare loss function of a dynamic stochastic general equilibrium model with complete exchange rate pass through. We find that consumer price index (CPI) inflation targeting minimizes welfare losses for import-to-gross domestic product (GDP) ratios from 0.3 to 0.9. However, welfare under the pegged exchange rate regime is almost equivalent to CPI inflation targeting when the import-to-GDP ratio is 1, while the domestic inflation targeting minimizes welfare when the import-to-GDP ratio is 0.1. We calibrate the model and derive welfare implications for eight East Asian small open economies."
dc.publisherAsian Development Bank
dc.titleA Welfare Evaluation of East Asian Monetary Policy Regimes under Foreign Output Shock
dc.typeWorking Papers
dc.subject.expertEconomic Welfare
dc.subject.expertEconomic Incentives
dc.subject.adbSocial condition
dc.subject.adbEconomic dependence
dc.subject.adbEconomic assistance
dc.subject.naturalWelfare economics
dc.subject.naturalWelfare state
dc.subject.naturalPoor
dc.subject.naturalFood relief
dc.subject.naturalPoverty
dc.subject.naturalDomestic economic assistance
dc.title.seriesADB economics working paper series
dc.title.volumeNo. 299
dc.contributor.imprintAsian Development Bank
oar.themeEconomics
oar.adminregionAsia and the Pacific Region
oar.countryBangladesh
oar.countryBhutan
oar.countryIndia
oar.countryMaldives
oar.countryNepal
oar.countrySri Lanka
oar.countryBrunei Darussalam
oar.countryBrunei Darussalam
oar.countryCambodia
oar.countryIndonesia
oar.countryLao People's Democratic Republic
oar.countryMalaysia
oar.countryMyanmar
oar.countryPhilippines
oar.countrySingapore
oar.countryThailand
oar.countryViet Nam
oar.countryCook Islands
oar.countryFiji
oar.countryKiribati
oar.countryMarshall Islands
oar.countryMicronesia, Federated States of
oar.countryNauru
oar.countryPalau
oar.countryPapua New Guinea
oar.countrySamoa
oar.countrySolomon Islands
oar.countryTimor-Leste
oar.countryTonga
oar.countryTuvalu
oar.countryVanuatu
oar.countryAfghanistan
oar.countryArmenia
oar.countryAzerbaijan
oar.countryGeorgia
oar.countryKazakhstan
oar.countryKyrgyz Republic
oar.countryPakistan
oar.countryTajikistan
oar.countryTurkmenistan
oar.countryUzbekistan
oar.countryChina, People’s Republic of
oar.countryHong Kong, China
oar.countryChina, People’s Republic of
oar.countryRepublic of Korea
oar.countryMongolia
oar.countryTaipei,China
oar.identifierOAR-001231
oar.authorAlba, Joseph D.
oar.authorChia, Wai-Mun
oar.authorPark, Donghyun
oar.importtrue
oar.googlescholar.linkpresenttrue


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