#2006-030A "U.K. Inflation Targeting and the Exchange Rate"
by Christopher Allsopp, Amit Kara, and Edward Nelson
May 2006

The United Kingdom’s monetary policy strategy is one of floating exchange rates and inflation forecast targeting, with the targeted measure referring to consumer prices. We consider whether it is welfare-reducing to target inflation in the CPI rather than in a narrower index; and the role of the exchange rate in the transmission of monetary policy actions to CPI inflation. More...

PUBLISHED: Economic Journal, June 2006, 116(512), pp. F232-44

#2003-020B "International Evidence on the Stability of the Optimizing IS Equation"
by Amit Kara, and Edward Nelson
August 2003
Revised January 2004

In this paper we provide international evidence on the issue of whether the optimizing IS equation is more stable than a backward-looking alternative. The international evidence consist of estimates of IS equations on quarterly data for the UK and Australia, both for the full sample of the last 40 years and for the period following major monetary policy shifts in 1979.80. More...