While an extensive literature has been studying the performance of alternative monetary rules in large closed economies, only recently attention has shifted towards the analysis of monetary policy rules in an open economy setting. As reference for scholars interested in this topic, we collect papers that address the implications of monetary policy rules in open economies.

We would greatly appreciate anyone who knows of papers we have omitted to let us know via e-mail, so that we may update the page.

For a collection of the main contributions to the closed economy literature we refer to John Taylor's home page at Stanford University. You can also access his book on "Macroeconomic Policy in a World Economy."

New Papers

• Flamini, Alessandro (2001), "Open-Economy Inflation Targeting and Exchange Rate Pass Through," HEI Working Paper No. 03/2001.
• Pappa, Evi (2002), "Do the ECB and the Fed Really Need to Cooperate? Optimal Monetary Policy in a Two-Country World," LSE

Conferences on Monetary Policy

• Monetary Policy Rules in Models of the Canadian Economy, Bank of Canada, Ottawa, October 25, 2001.
• Asset Prices, Exchange Rates and Monetary Policy, SIEPR and FRBSF, Palo Alto, March 2-3, 2001.
• 10 Years of Inflation Targeting: Design, Performance, Challenges, Santiago, Chile, November 30 - December 1, 2000
• First ECB Central Banking Conference, Frankfurt am Main, 2 and 3 November, 2000.
• Monetary Policy Challenges in the 21st Century: A Transatlantic Perspective,Georgetown University, October 27-28, 2000.
• The Conduct of Monetary Policy in Open Economies, Workshop, Central Bank of Norway, Oslo, 26 - 27 October 2000.
• Monetary Policy under Incomplete Information, October 12 - Saturday, October 14, 2000.
• The Role of Monetary Policy under Low Inflation: Deflationary Shocks and Policy Responses, July 3-4, 2000
  Ninth International Conference, Institute for Monetary and Economic Studies, Bank of Japan.

Theoretical Contributions:
 

• Atkeson, Andrew and Patrick Kehoe (2001), "Exchange-rate target versus monetary targets: The advantage of transparency," mimeo, UCLA and Federal Reserve Bank of Minneapolis.
• Ball, Laurence (1998), "Policy Rules for Open Economy," NBER working paper #6770;
• Ball, Laurence (2000), "Policy Rules and External Shocks," NBER working paper #7910;
• Batini, Nicoletta and Andrew Haldane (1999), "Forward Looking Rules for Monetary Policy," Bank of England working paper #91;
• Benigno, Gianluca (1999), "Real Exchange Rate Persistence and Monetary Policy Rules," mimeo UC Berkeley;
• Benigno, Gianluca, Pierpaolo Benigno and Fabio Ghironi (2000), "Interest Rates Rules for Fixed Exchange Rate Regimes," mimeo, UC Berkeley, Princeton University and Federal Reserve Bank of New York;
• Benigno, Gianluca and Pierpaolo Benigno (2000) "Price Stability as a Nash Equilibrium in Open Economy," mimeo, Bank of England and New York University.
• Benigno, Gianluca and Pierpaolo Benigno (2000), "Monetary Policy Rules and the Exchange Rate," mimeo UC Berkeley and Princeton University;
• Benigno, Gianluca and Pierpaolo Benigno (2002), “Implementing Monetary Cooperation through Inflation Targeting”, 2002, CEPR DP #3226.
• Benigno, Gianluca and Christoph Thoenissen (2002), "Equilibrium Exchange Rate and Supply Side Performance," Bank of England working paper #156.
• Benigno Pierpaolo (1999), "Optimal Monetary Policy in a Currency Area," mimeo Princeton University;
• Benigno, Pierpaolo (2001), "Price Stability with Imperfect Financial Integration," CEPR DP 2854.
• Berument, Hakan and Hakan Tasci (2002), "Monetary Policy Rules in Practice: Evidence from Turkey," unpublished manuscript, Bilkent University.
• Borondo Carlos (2000) "International Transmission of Monetary Shocks with Interest Rate Rules," mimeo Universidad de Valladolid, Spain;
• Carlstrom, Charles T. and Timothy S. Fuerst (1999), "Optimal monetary policy in a small, open economy: a general-equilibrium analysis," Federal Reserve Bank of Cleveland, Working Paper. No. 9911;
• Cavallo, Michele and Fabio Ghironi (2001), "Net Foreign Assets and the Exchange Rate: Redux Revived," WP 505, Department of Economics, Boston College (prepared for the November 2001 Carnegie-Rochester Conference on Public Policy).
• Clarida, Richard, Jordi Gali, and Mark Gertler (2001), "Optimal Monetary Policy in Open vs. Closed Economies: An Integrated Approach," mimeo, New York University;
• Clarida, Richard, Jordi Galí, and Mark Gertler (2001): "A Simple Framework for International Monetary Policy Analysis," prepared for the November 2001 Carnegie-Rochester Conference on Public Policy.
• Corsetti, Giancarlo and Paolo Pesenti (2001), "International Dimension of Optimal Monetary Policy," mimeo, University of Rome III, Yale University and Federal Reserve Bank of New York;
• Corsetti, Giancarlo and Paolo Pesenti (2002), "Self-validating Optimum Currency Areas, unpublished manuscript, Rome III and Federal Reserve Bank of New York.
• Darracq-Paries Matthieu 2002), "Price Setting and Optimal Monetary Policy Cooperation: A New Keynesian Perspective," unpublished manuscript.
• De Fiore, Fiorella and Zheng Liu (2002), "Openness and Equilibrium Determinacy Under Interest Rate Rules," European Central Bank Working Paper #173.
• Devereux, Michael and Charles Engel (2000), "Monetary Policy in the Open Economy Revised: Price Setting and Exchange Rate Flexibility," NBER working paper #7665;
• Devereux, Michael and Philip Lane (2000) "Exchange Rate Regime and Monetary Policy Rules for Emerging Markets," mimeo, University of British Columbia;
• Faia, Ester (2002), "Monetary Policy in World with Asymmetric Financial Systems," unpublished manuscript, New York University.
• Faia, Ester and Tommaso Monacelli (2002), "Financial Exposure, Exchange Rate Regime and Fear of Floating," unpublished manuscript, New York university and Boston College.
• Gali, Jordi and Tommaso Monacelli (1999), "Optimal Monetary Policy and Exchange Rate Variability in a Small Open Economy," mimeo Boston College;
• Gertler Mark, Simon Gilchrist and Fabio Massimo Natalucci (2000) "External Constraints on Monetary Policy and the Financial Accelerator," mimeo, New York University;
• Ghironi, Fabio (2000a), “Understanding Macroeconomic Interdependence: Do We Really Need to Shut Off the Current Account?,” WP 465, Department of Economics, Boston College.
• Ghironi, Fabio (2000b), “Alternative Monetary Rules for a Small Open Economy: The Case of Canada,” WP 466, Department of Economics, Boston College.
• Ghironi, Fabio and Alessandro Rebucci (2000)"Monetary Rules for Emerging Market Economies," WP 476, Department of Economics, Boston College.
• Kollmann, Robert (2001): "Monetary Policy Rules in the Open Economy: Effects on Welfare and Business Cycles," prepared for the November 2001 Carnegie-Rochester Conference on Public Policy.
• Leitemo Kai (1999),"Inflation Targeting Strategies in Small Open Economies," June 1999. Department of Economics, University of Oslo, working paper 21/99.
• Leitemo,Kai (2000) "The Performance of Inflation Forecast Feedback Rules in Small Open Economies," mimeo, forthcoming in Norges Bank Working Paper series;
• Leitemo, Kai and Roisland Oistein (1999), "Choosing a Monetary Policy Regime: Effects on the Traded and Non-Traded Sectors," Department of Economics, University of Oslo, working paper 04/99.
• Leitemo,Kai, Øistein Røisland and Ragnar Torvik (2000), "Exchange Rate Determination and Monetary Policy Rules,"
  mimeo, Norges Bank and Norwegian University of Science and Technology;
• Leitemo,Kai and Ulf Söderström  (2000) "Simple monetary policy rules and exchange rate uncertainty," mimeo, Norges Bank and Sveriges Riksbank;
• Leith Campbell and Simon Wren-Lewis (2002), "Compatibility Between Monetary and Fiscal Policy Under EMU", unpublished manuscript, University of Glasgow and University of Exeter;
• Leith Campbell and Simon Wren-Lewis (2002), "Interactions Bewtween Monetary and Fiscal Policy Under Flexible Exchange Rates", unpublished manuscript, University of Glasgow and University of Exeter;
• Leith Campbell and Simon Wren-Lewis (2002), "Taylor Rules in the Open Economy", unpublished manuscript, University of Glasgow and University of Exeter;
• McCallum, Bennett T. (2000) "Inflation Targeting and the Liquidity Trap," mimeo, Carnegie-Mellon;
• McCallum Bennett and Edward Nelson (1998) "Nominal Income Targeting in an Open Economy Optimizing Model," NBER working paper #6675;
• McCallum, Bennett T. and Edward Nelson (2001) "Monetary Policy for an Open Economy: An Alternative Framework with Optimizing Agents and Sticky Prices," NBER working paper #8175.
• Monacelli Tommaso (1998), "Into the Mussa Puzzle: Monetary Regimes and the Real Exchange Rate in a Small Open Economy," mimeo Boston College;
• Monacelli Tommaso (1999), "Open Economy Policy Rules under Imperfect Pass-Through," mimeo Boston College;
• Monacelli, Tommaso (2000) "Relinquishing Monetary Policy Independence," mimeo, Boston College.
• Morón, Eduardo and Diego Winkelried (2001), "Monetary Policy Rules for Financially Vulnerable Economies," mimeo, Universidad del Pacifico and Banco Central de Reserva del Perú.
• Obstfeld Maurice and Kenneth Rogoff (2000), "Do We Really Need a New Global Monetary Compact," mimeo UC Berkeley and Harvard University;
• Orphanides, Athanasios and Volcker Wieland (1999), "Efficient Monetary Policy Design Near Price Stability," forthcoming Journal of Japanese and International Economies, December 2000.
• Schmitt-Grohe', Stephanie and Martin Uribe (2000): "Stabilization Policy and the Costs of Dollarization,"  mimeo, Rutgers University and University of Pennsylvania;
• Smets, Frank, and Raf Wouters (2001): "Openness, Imperfect Exchange Rate Pass-Through and Monetary Policy," prepared for the November 2001 Carnegie-Rochester Conference on Public Policy.
• Svensson Lars E.O. (2000), "Open-Economy Inflation Targeting,"  Journal of International Economics (50)1 pp. 155-183; Sutherland, Alan (2001), "Inflation Targeting in a Small Open Economy," unpublished manuscript, St. Andrews University.
• Sutherland, Alan (2002), "Cost-Push Shocks and the Optimal Choice of Monetary Target in an Open Economy," unpublished manuscript, St. Andrews University.
• Sutherland, Alan (2002), "The Expenditure Switching Effect, Welfare and Monetary Policy in an Open Economy," unpublished manuscript, St. Andrews University.
• Sutherland, Alan (2002), "Incomplete Pass-Through and the Welfare Effects of Exchange Rate Variability," unpublished manuscript, St. Andrews University.
• Taylor, John (2000) "Using Monetary Policy Rules in Emerging Market Economies", mimeo, Stanford University;
• Taylor, John (2000) "The Role of the Exchange Rate in Monetary Policy Rules," mimeo, Stanford University;
• Tchakarov Ivan (2002), "The Gains from International Monetary Cooperation Revisited", unpublished manuscript, UC Davis.
• Uribe, Martin (2000), "Real Exchange Rate Targeting and Macroeconomic Instability," mimeo, Department of Economics, University of Pennsylvania;
• Walsh Carl E. (1999), "Monetary Policy Trade-Offs in the Open Economy," mimeo UC Santa Cruz;
• Weerapana, Akila (1998), "The Performance of Simple Monetary Policy Rules in a Large Open Economy," Department of Economics, Wellesley College Working Paper #2000-05.
• Weerapana, Akila (1998), "Monetary Policy Interactions Between the U.S. and the EMU," mimeo, Department of Economics, Wellesley College;
• Zanna Luis-Felipe (2002), "Designing an interest rate rule in the aftermath of BOP crises" , unpublished manuscript, University of Pennsylvania.
• Zanna Luis-Felipe (2002), "Taylor Rules and Multiple Equilibria in the Small Open Economy: The Role of Non-traded goods" , unpublished manuscript, University of Pennsylvania.

Empirical Contributions:

Papers in this section focus on the estimation of monetary rules and/or models used to analyze the performance of alternative monetary rules.

• Altavilla, Carlo (2000) "Assessing Monetary Rules Perfomances across EMU countries," mimeo, University of Leuven.
• Benigno, Pierpaolo, and David López-Salido (2001), "Inflation Persistence and Optimal Monetary Policy in the Euro Area," unpublished manuscript, New York University and Bank of Spain.
• Bjorksten, Nils and Miika Syrjanen (1999), "Divergences in the Euro Area: a Cause for Concern?," Bank of Finland Discussion Papers 11/99.
• Clarida, Richard, Jordi Gali, and Mark Gertler (1997),"Monetary Rules in Practice: Some International Evidence," NBER Working Paper #6254.
• Dolado Juan Jose' and Ramon Maria-Dolores (2000), "Asymmetries in Monetary Policy Rules: Evidence for Four Central Banks," CEPR DP 2441, April 2000.
• Dueker, Michael and Andreas M. Fischer (1996), "Inflation targeting in a small open economy: empirical results for Switzerland," Journal of Monetary Economics, 37, pp. 89-103.
• Dueker, Michael and Gyuhan Kim (1999), "A monetary policy feedback rule in Korea’s fast growing economy,"Journal of International Financial Markets, Institutions and Money, 9, pp. 19-31.
• Gerlach, Stefan, and  Gert Schnabel (1999), "The Taylor and Interest Rates in the EMU Area: A Note," BIS Working Paper.
• Ghironi, Fabio (2000c), “Towards New Open Economy Macroeconometrics,” WP 469, Department of Economics, Boston College.
• McCallum, Bennett (2000), "Alternative Monetary Policy Rules: A Comparison with Historical Settings for the United States, the United Kingdom, and Japan," NBER working paper #7725;
• Peersman, Gert, and Frank Smets (1999), "Uncertainty and the Taylor Rule in a Simple Model of the Euro Area Economy," Working Paper presented at the conference "Monetary Policy of the ESCB: Strategic and Implementation Issues", Milan, 6-7 July1998.
• Plantier Christopher and Dean Scrimgeour (2002), "Estimating a Taylor Rule for New Zealand with a time-varying neutral real rate", Reserve Bank of New Zeland, Discussion Paper 2002/06.
• Sanchez-Fung José R.(2000),"Central bank behaviour under a multiple exchange rate regime and institutional constraints: Evidence for a Latin American economy," mimeo, Keynes College University of Kent at Canterbury.
• Weymark, Diana N. (2000),"Using Taylor Rules as Efficiency Benchmarks," working paper, Vanderlbilt University.

Giancarlo Corsetti's Home Page on the Euro
Brian Doyle's Home Page on New Open Macroeconomics
Nouriel Roubini's Home Page on The Asian and Global Crisis
John Taylor's Home Page on Monetary Policy Rules (mostly closed economy perspective)