Predictability of nominal exchange rates in inflation targeting economies

• Project/Area Number: 24K16355
• Research Category: Grant-in-Aid for Early-Career Scientists
• Allocation Type: Multi-year Fund
• Review Section: Basic Section 07040:Economic policy-related
• Research Institution: Hitotsubashi University
• Principal Investigator: Hu Wenjiao 一橋大学, 社会科学高等研究院, 特任講師 (70990448)
• Project Period (FY): 2024-04-01 – 2026-03-31
• Project Status: Granted (Fiscal Year 2024)
• Budget Amount: ¥4,680,000 (Direct Cost: ¥3,600,000、Indirect Cost: ¥1,080,000); Fiscal Year 2025: ¥1,430,000 (Direct Cost: ¥1,100,000、Indirect Cost: ¥330,000); Fiscal Year 2024: ¥3,250,000 (Direct Cost: ¥2,500,000、Indirect Cost: ¥750,000)
• Keywords: exchange rate return / Inflation targeting / low-income countries

Outline of Research at the Start

This research will focus on the influences of inflation targeting on exchange rate predictability and investigate the econometric tools in attempting to precisely measure its impact. Advanced economies including Japan as well as emerging and lower income economies will be studied. Based on the empirical evidence, policies and supporting framework for financial stability will also be discussed.