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Article
Publication date: 27 July 2012

Jihene Bousrih

The purpose of this paper is to deal with the dynamics of a Neo‐Keynesian model applied to a small open economy, in order to show the impact of commercial openness on the choice…

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Abstract

Purpose

The purpose of this paper is to deal with the dynamics of a Neo‐Keynesian model applied to a small open economy, in order to show the impact of commercial openness on the choice of the optimal inflation target.

Design/methodology/approach

The author uses a neo‐Keynesian model with calibration for Chile.

Findings

The results show that there is a relation between the degree of openness and the type of inflation targeting policy.

Originality/value

The originality of the paper is to use a neo‐Keynesian model to deal with a small open economy, which uses inflation targeting as a monetary rule.

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Article
Publication date: 1 April 2014

Thomas D. Willett

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