Inflation Targeting at 20: Achievements and Challenges

Author/Editor: Roger, Scott
Publication Date: October 01, 2009
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Disclaimer: This Working Paper should not be reported as representing the views of the IMF. The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate
Summary: This paper provides an overview of inflation targeting frameworks and macroeconomic performance under inflation targeting. Inflation targeting frameworks are generally quite similar across countries, and a broad consensus has developed in favor of "flexible" inflation targeting. The evidence shows that, although inflation target ranges are missed frequently in most countries, the inflation and growth performance under inflation targeting compares very favorably with performance under alternative frameworks. Inflation targeters also tentatively appear to be coping better with the commodity price and financial shocks in 2007-2009 than non-inflation targeters. Key issues going forward include adapting inflation targeting to emerging market and developing countries, and incorporating financial stability issues into the framework.
Series: Working Paper No. 09/236
Subject(s): Central bank policy | Cross country analysis | Developing countries | Disinflation | Emerging markets | Financial sector | Financial stability | Inflation targeting | Monetary policy | Price stabilization | Transparency

Author's Keyword(s): inflation targeting | monetary policy
Publication Date: October 01, 2009
Format: Paper
Stock No: WPIEA2009236 Pages: 31
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