Inflation targeting and monetary analysis in Chile and Mexico

This paper studies the role of monetary and open economy indicators in inflation targeting (IT) economies through the analysis of a nested Phillips curve/ P-star model for Chile and Mexico. For Chile a real money gap and a money growth indicator are found to be relevant in predicting deviations of observed from target inflation. In contrast, for Mexico real exchange rate measures are robust predictors of deviations of actual from (i) expected inflation during the pre-IT (1999) period, and (ii) target inflation in the post-IT span.inflation targeting, monetary policy, money demand, PPP, P-star, Phillips curve, cointegration, Kalman filter, block Granger non-causality, VARs

Transonic flow studies

Major emphasis was on the design of shock free airfoils with applications to general aviation. Unsteady flow, transonic flow, and shock wave formation were examined

China’s monetary policy and the exchange rate

The paper models monetary policy in China using a hybrid McCallum-Taylor empirical reaction function. The feedback rule allows for reactions to inflation and output gaps, and to developments in a trade-weighted exchange rate gap measure. The investigation finds that monetary policy in China has, on average, accommodated inflationary developments. But exchange rate shocks do not significantly affect monetary policy behavior, and there is no evidence of a structural break in the estimated reaction function at the end of the strict dollar peg in July 2005. The paper also runs an exercise incorporating survey-based inflation expectations into the policy reaction function and meets with some success.exchange rate; hybrid McCallum-Taylor monetary policy reaction function; SVAR; survey-based inflation expectations; China

Forecasting Inflation in China

This paper forecasts inflation in China over a 12-month horizon. The analysis runs 15 alternative models and finds that only those considering many predictors via a principal component display a better relative forecasting performance than the univariate benchmark.inflation forecasting; data-rich environment; principal components; China

Assessing the impact of different nominal anchors on the credibility of stabilisation programmes

The paper compares the impact of announcing exchange-rate-based versus money-based stabilisation programmes in a cross-section of countries. The analysis finds that the effect of announcing exchange-rate-based programmes is more credible, in terms of reducing inflation inertia, than the outcome associated with implementing money-based programmes. But the gap between the magnitudes of the impacts from implementing the different strategies has been falling since the 1970s.Inflation stabilisation; credibility; nominal anchors; IMF programmes

Structure of the chromosphere-corona transition region

Structure and energy distribution of chromosphere-corona transition regio