The asymmetric loss function and the central banks' ability in developing countries

Research output: Contribution to journalReview articlepeer-review

6 Citations (Scopus)


ABSTRACT This paper seeks to develop a theoretical strand of research in monetary economics by modelling central bank ability in the loss function. Recently, many working papers issued by the International Monetary Fund (IMF) prove that some central banks, particularly from developing countries, are suffering from serious operational problems that might affect their abilities to control the economy. Simultaneously, a literature review shows that the movements are toward using asymmetric loss function. Therefore, we utilize this function in the standard monetary approach. The results proved that both central bank ability and preference in developing countries are fundamental to explain inflation bias and the movement of monetary policy instrument.

Original languageEnglish
Pages (from-to)387-403
Number of pages17
JournalGlobal Economic Review
Issue number3
Publication statusPublished - 2008
Externally publishedYes


  • Asymmetric loss function
  • Central bank ability
  • Central bank losses
  • Developing countries
  • Inflation rate

ASJC Scopus subject areas

  • General Economics,Econometrics and Finance
  • Political Science and International Relations
  • Business and International Management


Dive into the research topics of 'The asymmetric loss function and the central banks' ability in developing countries'. Together they form a unique fingerprint.

Cite this