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Business and Economics > Banks and Banking

You are looking at 1 - 2 of 2 items for :

  • Type: Journal Issue x
  • Mobility, Unemployment, and Vacancies: General x
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Cover IMF Working Papers
How Do Adaptive Learning Expectations Rationalize Stronger Monetary Policy Response in Brazil?
Allan Dizioli
and
Hou Wang
This paper estimates a standard Dynamic Stochastic General Equilibrium (DSGE) model that includes a wage and price Phillip's curves with different expectation formation processes for Brazil and the USA. Other than the standard rational expectation process, we also use a limited rationality process, the adaptive learning model. In this context, we show that the separate inclusion of a labor market in the model helps to anchor inflation even in a situation of adaptive expectations, a positive output gap and inflation above target. The estimation results show that the adaptive learning model does a better job in fitting the data in both Brazil and the USA. In addition, the estimation shows that expectations are more backward-looking and started to drift away sooner in 2021 in Brazil than in the USA. We then conduct optimal policy exercises that prescribe early monetary policy tightening in the context of positive output gaps and inflation far above the central bank target.
Keywords:
DSGE; Inflation dynamics; optimal monetary policy; Forecasting and Simulation; Bayesian estimation.; learning expectation; inflation expectation; wages expectation; Inflation; Output gap; Real wages; Wage gap; Central bank policy rate; Global
Cover IMF Staff Country Reports
Israel: Selected Issues Paper
International Monetary Fund
This Selected Issues Paper states that Israel’s growth performance is impressive, with real GDP growing at a faster pace than many other OECD countries. The secular Jewish population enjoys a high level of living standards, whereas most Arab and Haredi people are poor, with poverty incidence reaching 60 percent for both groups. Low employment in Arab and Haredi communities is mainly accounted for by the low employment rate of Arab women and Haredi men.
Keywords:
ISCR; CR; bank; central bank; inflation targeting; inflation; employment rate; graduation rate; OECD average; defense investment; Haredim men; bank publication; monetary policy; Employment rate; Financial sector stability; Global