Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/257738 
Year of Publication: 
2020
Citation: 
[Journal:] International Journal of Financial Studies [ISSN:] 2227-7072 [Volume:] 8 [Issue:] 4 [Article No.:] 71 [Publisher:] MDPI [Place:] Basel [Year:] 2020 [Pages:] 1-16
Publisher: 
MDPI, Basel
Abstract: 
This article aims to examine the monetary policy rule under an inflation targeting in Mongolia with a focus on its conformity to the Taylor principle, through two kinds of approaches: a monetary policy reaction function by the generalized-method-of-moments (GMM) estimation and a New Keynesian dynamic stochastic general equilibrium (DSGE) model with a small open economy version by the Bayesian estimation. The main findings are summarized as follows. First, the GMM estimation identified an inflation-responsive rule fulfilling the Taylor principle in the recent phase of the Mongolian inflation targeting. Second, the DSGE-model estimation endorsed theGMMestimation by producing a consistent outcome on the Mongolian monetary policy rule. Third, the Mongolian rule was estimated to have a weaker response to inflation than the rules of the other emerging Asian adopters of an inflation targeting.
Subjects: 
monetary policy rule
Taylor principle
Mongolia
inflation targeting
GMM
the New Keynesian DSGE model
JEL: 
E52
E58
O53
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article

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