Stabilizing inflation in Iceland
By: prepared by Keiko Honjo and Benjamin Hunt.
Contributors: Hunt, Ben, 1958-; International Monetary Fund. European Dept.
Series: IMF working paper -- WP/06/262
Publisher: International Monetary Fund, European Dept.
Published: 2006
Place of publication: [Washington, D.C.]
Language: eng
Number of pages: 35
Subjects: Anti-inflationary policies -- Iceland -- Econometric models.; Economic stabilization -- Iceland -- Econometric models.; Monetary policy -- Iceland -- Econometric models.
Description: 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.
Notes: Caption title.

"November 2006."

Includes bibliographical references (p. [33]-35).

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