The Role of the Exchange Rate in Monetary Policy Rule - A Critical Evaluation

  • Alan Bristow

Abstract

In this essay, I examine the issues around the inclusion of the exchange rate channel into monetary policy rules, and look at how several central banks currently address exchange rates when determining interest rates. I then go onto examining the model used by Taylor in his paper, and discuss issues around this approach and make some suggestions of some desirable features for using the exchange rate channel in a policy rule. I then go on to provide an example of a very general policy rule and briefly discuss how it could be used in setting interest rates.

Author Biography

Alan Bristow,
Published
2013-05-28
How to Cite
BRISTOW, Alan. The Role of the Exchange Rate in Monetary Policy Rule - A Critical Evaluation. The New Zealand Review of Economics and Finance, [S.l.], v. 2, may 2013. ISSN 2324-478X. Available at: <https://ojs.victoria.ac.nz/nzref/article/view/1739>. Date accessed: 23 sep. 2019.