Inflation Targeting in Emerging Market Economies
- Topics:
- Inflation
- Tags:
- Currency & Foreign Exchange,
- Emerging Market,
- Finance,
- Financial Services,
- Inflation,
- Marketing,
- Marketing Research
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Overview: This paper assesses inflation targeting in emerging market economies (EMEs), and develops applied prescriptions for the conduct of monetary policy and inflation-targeting design in EMEs. The paper verifies that EMEs have faced more acute trade-offs higher output and inflation volatility and worse performance than developed economies. These results stem from more pronounced external shocks, lower credibility, and lower level of development of institutions in these countries. At an operational level, the paper proposes a procedure that a central bank under inflation targeting can apply and communicate when facing strong supply shocks, and suggests a monitoring structure for an inflation-targeting regime under an IMF program.
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Format: PDF | Size: 804KB | Date: Oct 2003 | Pages: 51
