Monetary Policy Rule and its Performance under Inflation Targeting in Thailand


Hiroyuki Taguchi, Mesa Wanasilp

Abstract


This article reviews the Thailand monetary policy rule and its performance under the adoption of inflation targeting regime since 2000. The study estimates the policy reaction function to see if the inflation targeting has been linked with an inflation-responsive monetary policy rule, and investigates whether the monetary policy rule would actually have its transmission effect on inflation, through tracing the impulse responses of inflation rate to monetary policy shocks. The main findings are as follows. The estimation outcomes of the policy reaction function show that the Thailand monetary policy rule is characterized as an inflation- and exchange-rate- responsive rule with forward-looking manner, which is countercyclical against inflation in the long run, but is accompanied with slow adjustment toward a target policy rate. The impulse response analyses imply that the Thailand monetary policy has only a marginal transmission effect on inflation probably due to the slow adjustment of policy rate.

Keywords


Monetary policy rule, Inflation targeting, The Bank of Thailand.

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About this article

Title

Monetary Policy Rule and its Performance under Inflation Targeting in Thailand

Keywords

Monetary policy rule, Inflation targeting, The Bank of Thailand.

DOI

10.20448/journal.501.2018.51.19.28

Date

2018-01-30

Additional Links

Manuscript Submission

Journal

Asian Journal of Economics and Empirical Research
Vol 5, No 1 (2018) Page: 19-28

Print ISSN

2518-010X

Online ISSN

2409-2622

Statistics

52 Views | 54 Downloads

Citations

0

Authors & Affiliations

Hiroyuki Taguchi
Saitama University
Japan

Mesa Wanasilp
Saitama University
Japan


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Asian Journal of Economics and Empirical Research

 Online ISSN: 2409-2622 | Print ISSN: 2518-010X

 

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