@techreport{NBERw9568,
 title = "Monetary Rules for Small, Open, Emerging Economies",
 author = "Douglas Laxton and Paolo Pesenti",
 institution = "National Bureau of Economic Research",
 type = "Working Paper",
 series = "Working Paper Series",
 number = "9568",
 year = "2003",
 month = "March",
 URL = "http://www.nber.org/papers/w9568",
 abstract = {This paper develops a variant of the IMF's Global Economic Model (GEM) suitable to analyze macroeconomic dynamics in open economies, and uses it to assess the effectiveness of Taylor rules and Inflation-Forecast-Based (IFB) rules in stabilizing variability in output and inflation. Our findings suggest that a simple IFB rule that does not rely upon any direct estimates of the equilibrium real interest rate and places a relatively high weight on the inflation forecast may perform better in small open economies than conventional Taylor rules.},
}