Optimal monetary policy rules improve economic stability in open economies.
The article explores the best ways to manage money in a country with financial issues. They looked at different rules for setting interest rates and found that rules based on predicting inflation and exchange rates work well. They also discovered that changes in other countries can affect how well a country's businesses do. By including exchange rates in the rules, the model fits better with real-world data. Overall, the study shows that international events can impact a country's economy in important ways.