Inflation Targeting in Georgia: Are We There Yet?
Electronic Access:
Free Download. Use the free Adobe Acrobat Reader to view this PDF file
Summary:
This paper evaluates whether Georgia is ready to adopt inflation targeting (IT), a monetary policy framework that several emerging markets have adopted recently. After reviewing selected prerequisites for successfully implementing IT, the paper focuses on whether one specific precondition is in place-an empirically stable monetary transmission mechanism. Building on a baseline VAR model, it presents several extensions to explore the various channels using causality tests, impulse responses, and variance decompositions. The paper finds that once the central bank overcomes some institutional and operational weaknesses and establishes a more reliable transmission mechanism, it could adopt IT over the medium term.
Series:
Working Paper No. 2007/193
Subject:
Currencies Exchange rates Inflation International reserves Monetary aggregates
English
Publication Date:
August 1, 2007
ISBN/ISSN:
9781451867572/1018-5941
Stock No:
WPIEA2007193
Pages:
33
Please address any questions about this title to publications@imf.org