Stabilizing Inflation in Iceland

WPIEA2006262 Image
Price:  $18.00

Author/Editor: Keiko Honjo, Benjamin Hunt
Release Date: © November, 2006
ISBN : 978-1-45186-522-6
Stock #: WPIEA2006262
Stock Status: On back-order

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This paper provides some empirical estimates on how tightly is it feasible to control inflation in a very small open economy such as Iceland. Estimated macroeconomic models of Canada, Iceland, New Zealand, the United Kingdom, and the United States are used to derive efficient monetary policy frontiers that trace out the locus of the lowest combinations of inflation and output variability that are achievable under a range of alternative monetary policy rules. These frontiers illustrate that inflation stabilization is more challenging in Iceland than in other industrial countries primarily because of the relative magnitudes of the economic shocks.


Economic policy , Economic stabilization , Inflation , Monetary policy

More publications in this series: Working Papers

More publications by: Keiko Honjo ; Benjamin Hunt