Macroeconomic Policy Strategy for A Small Transition Economy, Mongolia

Macroeconomic Policy Strategy for A Small Transition Economy, Mongolia

&nbsp;&nbsp;Mongolia, a former socialist country is formulating long-term plans for economic growth and seeking appropriate policy strategies. To achieve economic objectives, the government tries to adopt a variety of policies including trade policy, monetary policy, fiscal policy, and foreign debt management.<BR>&nbsp;&nbsp;In this paper, we attempt to shed light on the adoption of policy strategies for a small open economy in general, and for Mongolia, in particular. We point out the interdependence of macroeconomic goals and the necessity of taking the appropriate use of effective policies for Mongolia. Also we recommend range-targeting instead of point-targeting when deciding on the targets on growth, inflation, money supply and the exchange rate because of uncertainty and time lag in policy effectiveness.