研讨论文

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

论文作者

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

主讲人

王忏

时间

2022年

12月10日 18:30-21:30

地点

370-857-261（腾讯会议）

点评老师

王忏、明洋

活动对象

创新发展学院研究生

论文摘要

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.