## _wp04191 - 1. Overview of Monetary Regimes

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---

### Taxonomy of monetary regimes
- Monetary regimes are defined by the choice and clarity of the nominal anchor.
- The seven all-inclusive regimes in the taxonomy:
  - Monetary nonautonomy
  - Exchange rate peg
  - Full-fledged inflation targeting
  - Implicit price stability anchor
  - Inflation targeting lite
  - Weak anchor
  - Money anchor

### Definitions and clarity
- Nominal anchor: a publicly announced nominal variable used as a target for monetary policy (examples: currency of another country, monetary target, exchange rate target, inflation target).
- Clarity components:
  - Transparency (e.g., press releases, detailed inflation reports).
  - Accountability (e.g., government involvement in setting targets, requirements to publicly explain failures).
- Operational definition of price stability used in the paper:
  - 10 years of average inflation below 4 percent.

### Central bank self-reported commitment and discretion (selected regime averages from Fry and others, 2000; reporting countries in parentheses)
- Monetary nonautonomy (5): Exchange rate Commitment 100.0; Inflation Commitment 0.0; Discretion 0.0.
- Exchange rate peg (12): Exchange rate Commitment 66.8; Inflation Commitment 20.4; Discretion 36.4.
- Full-fledged inflation targeting (9): Exchange rate Commitment 10.4; Inflation Commitment 93.3; Discretion 12.1.
- Implicit price stability anchor (4): Exchange rate Commitment 31.3; Inflation Commitment 22.0; Discretion 54.5.
- Inflation targeting lite (17): Exchange rate Commitment 22.6; Inflation Commitment 48.4; Discretion 51.5.
- Weak anchor (4): Exchange rate Commitment 23.5; Inflation Commitment 42.3; Discretion 60.5.

### Regime prevalence and historical trends (selected figures and changes 1990–2003)
- In 2003:
  - Nonautonomy: 9 countries.
  - Exchange rate peg: 21 countries.
  - Full-fledged inflation targeting: 20 countries.
  - Implicit price stability anchor: 5 countries.
  - Inflation targeting lite: 20 countries.
- Money anchor: used by 5 countries in 1990 and became extinct by 2000.
- Weak anchor countries decreased from 13 in 1990 to 0 in 2002.
- Over 1990–2003:
  - The number of monetary nonautonomy countries almost doubled.
  - The share of countries with an exchange rate peg fell from one-half to one-quarter.
  - The share of full-fledged inflation targeters rose from nil to one-quarter.
- Advanced countries:
  - In 1990 two-thirds adhered to an exchange rate peg.
  - By 2003 almost all advanced countries use either full-fledged inflation targeting or implicit price stability anchoring (only one advanced country remained an exception—Denmark).
- Emerging market countries (1990 → 2003):
  - 1990: about one-half used exchange rate pegs and one-quarter had a weak anchor.
  - 2003: exchange rate pegs and inflation targeting lite each had about one-third share; remaining split about evenly between nonautonomous and full-fledged inflation targeting.

### Empirical regularities across regimes
- Inflation patterns (1990–2003, regimes excluding weak anchor for comparability):
  - Implicit price stability anchor countries have the lowest inflation (by definition).
  - Full-fledged inflation targeting countries have the next lowest inflation.
  - Money anchor countries (mostly advanced) show fairly low inflation.
  - Exchange rate peg countries show surprisingly higher inflation on average (reflecting adjustable/movable targets).
  - Inflation targeting lite countries exhibit a wide dispersion of inflation outcomes.
- Exchange rate movements (annual changes vis-à-vis the U.S. dollar):
  - Distributions of annual exchange rate changes do not vary across regimes as much as inflation rates.
  - Inflation is generally a better discriminator of regimes than U.S. dollar exchange rate movements.
- Commitment-discretion consistency:
  - Self-reported measures align with taxonomy: nonautonomy = highest commitment / lowest discretion; weak anchor and implicit price stability = lowest commitment / highest discretion; full-fledged inflation targeting = strongest inflation commitment and low discretion.

### Choice of regime: decision-tree framework (binary nodes)
- First node: monetary autonomy (retain an independent national currency) versus nonautonomy.
  - Nonautonomy favored when extreme price instability and large currency depreciation are present at adoption (high cost of exiting nonautonomy implies persistence).
  - Empirical evidence: nonautonomy adopters had very high percentile rankings of inflation and depreciation at adoption (median percentile ranking of inflation 99; currency depreciation 98; see Table 5).
- Second node: inflation targeting lite versus a strong anchor regime (exchange rate peg, full-fledged inflation targeting, implicit price stability anchor).
  - Choice depends on credibility to commit to a strong anchor and preconditions (size, development, financial depth, inflation record).
  - Inflation targeting lite countries tend to have lower GDP per capita, less developed financial sectors, higher dollarization, larger terms-of-trade shocks, and poorer inflation records.
- Third node: exchange rate peg versus strong inflation anchor (full-fledged inflation targeting or implicit price stability anchor).
  - Exchange rate peg countries tend to have more closed capital accounts, higher dollarization, and more externally oriented trade flows; strong inflation anchor countries are larger, more developed, and have deeper financial sectors.
  - Regression findings: GDP (size) is the most robust predictor; higher dollarization is associated with higher probability of a fixed exchange rate.
- Fourth node: full-fledged inflation targeting versus implicit price stability anchor.
  - Implicit price stability anchor countries are larger, more developed, and have deeper and more active financial systems than full-fledged inflation targeters — enabling implicit commitment with greater discretion.
  - Formal accountability is more necessary in full-fledged inflation targeting countries with shallower markets.

### Econometric and statistical evidence (high-level)
- Kolmogorov-Smirnov (KS) tests (selected results):
  - Inflation targeting lite versus strong anchor regime:
    - GDP per capita KS stat. 0.46, P value 0.00.
    - Terms of trade volatility KS stat. 0.47, P value 0.01.
    - Dollarization KS stat. 0.44, P value 0.01.
  - Exchange rate peg versus strong inflation anchor:
    - GDP KS stat. 0.65, P value 0.00.
    - Capital account openness KS stat. 0.47, P value 0.01.
    - Dollarization KS stat. 0.47, P value 0.01.
- Binomial probit regressions (summary):
  - Dependent variable =1 for inflation targeting lite (0 otherwise): log of per capita $GDP significantly negative (strong anchor associated with higher per capita GDP); lagged inflation positive and significant for lite classification.
  - Dependent variable =1 for exchange rate peg (0 otherwise): log of $GDP negative (strong inflation anchor associated with larger GDP); dollarization positively associated with peg probability.

### Policy implications and recommendations
- Regime switches should be evaluated in terms of commitment versus discretion tradeoffs and the country’s structural and historical circumstances.
- For an inflation targeting lite country considering a move to full-fledged inflation targeting:
  - Ensure the means for a high degree of clarity (transparency and accountability) in monetary policy implementation.
- Advanced countries: the main policy question is not the choice of anchor (most have adopted an inflation anchor) but the optimal degree of clarity of that anchor.
- For emerging markets: small differences in economic circumstances can lead to different regime choices; policy design should account for size, financial depth, dollarization, and terms-of-trade volatility.
- The taxonomy can inform refinements in transparency and accountability and anticipate emergence of intermediate regimes (e.g., between implicit price stability anchor and full-fledged inflation targeting).

### Data documentation — indicators, periods, sources, and notes (selected)
- Level of development:
  - GDP (in billions USD) — Average, 1990-99 — Source: WEO.
  - GDP per capita (in 000’s USD) — Average, 1990-99 — Source: WEO.
  - Trade flows (exports plus imports) to GDP — Average, 1990-99 — Source: WEO.
- Real shocks:
  - Output gap volatility — Average, 1990-99 — Source: WEO — Standard deviation of output gap (percent of potential GDP).
  - Terms of trade volatility — Average, 1990-99 — Source: WEO — Standard deviation of the terms of trade.
- External:
  - Current account balance to GDP — 1999-2000 — Source: WEO.
  - Capital account openness — 1998 — Source: Lane and Milesi-Ferretti (2003).
  - Dollarization — 2001 — Source: De Nicolo, Honohan, and Ize (2003); Arteta (2002) — Foreign currency deposits to total deposits.
- Financial stability:
  - Currency crisis indicator — 1989-99 — Source: IFS — Weighted average of % change in reserves and % change in exchange rate. Threshold is chosen to be 1 st. deviation of index plus the mean. Weights are chosen to equalize the variances.
- Financial development:
  - Broad money to GDP — Average, 1990-99 — Source: WEO.
  - Standard mkt. cap to GDP — Average, 1990-99 — Source: WDI.
- Nominal stability (monthly data):
  - CPI inflation, annual average — Average 1990-99 — Source: IFS.
  - Nominal interest rate, average — 1997-2002 — Source: IFS.
  - Exchange rate, standard deviation, monthly — 1999-2002 — Source: IFS.
  - CPI inflation, standard deviation, monthly — 1999-2002 — Source: IFS.
- Institutional:
  - Freedom index — 2001/2002 — Source: Freedomhouse.org.
  - Central bank inflation focus — 1999 — Source: Fry and others (2000).
  - Central bank exchange rate focus — 1999 — Source: Fry and others (2000).
  - Central bank discretion — 1999 — Source: Fry and others (2000).

*Source: _wp04191 - 1. Overview of Monetary Regimes (PDF chapter/section).*

### 1. Overview of Monetary Regimes ..................................................................................19

### _wp04191 - 1. Overview of Monetary Regimes ..................................................................................19

### Sections
- 1. Overview of Monetary Regimes ..................................................................................19
- 2. Central Bank Self-Reported Commitment and Discretion ..........................................20
- 3. Monetary Regimes, Descriptive Statistics ...................................................................21
- 4. Monetary Regimes, Kolmogorov-Smirnov Statistics ..................................................22
- 5.         Nonautonomous         Countries,         Indicators at the Year of the  
 Adoption of Nonautonomy ..........................................................................................23
- 6.         Monetary         Regime         Binomial Regression Results .........................................................24

### Figures
- 1. Monetary Regimes, Central Bank Self-Reported Policy Discretion and 
            Commitment,            1999 ......................................................................................................32
- 2. Monetary Regimes, Larger and More Developed Countries, 1990–2003 ...................33
- 3. Monetary Regimes, Inflation and Exchange Rate Changes, 1990-2003 .....................34
- 4. Monetary Regimes, Advanced Countries, 1990–2003 ................................................35
- 5. Monetary Regimes, Emerging Market Countries, 1990-2003.....................................36
- 6.         Discretion         Index,         Advanced         and Emerging Markets, 1990–2003 ...............................37
- 7. Monetary Regime Decision Tree .................................................................................38

### Appendices
- I. Monetary Regime Classifications, Larger and More Developed Countries,  
            1990-2003 ....................................................................................................................25 
- II. Classification of Countries into Monetary Regimes ....................................................28 
- III.       Data       Documentation ....................................................................................................30

*Source: _wp04191 - 1. Overview of Monetary Regimes (PDF chapter/section).*

### References..............................................................................................................

### _wp04191 - References

### Taxonomy of monetary regimes
- Monetary regimes are defined by the choice and clarity of the nominal anchor.
- The seven all-inclusive regimes in the taxonomy:
  - Monetary nonautonomy
  - Exchange rate peg
  - Full-fledged inflation targeting
  - Implicit price stability anchor
  - Inflation targeting lite
  - Weak anchor
  - Money anchor

### Definitions and clarity
- Nominal anchor: a publicly announced nominal variable used as a target for monetary policy (examples listed: currency of another country, monetary target, exchange rate target, inflation target).
- Clarity is broken down into:
  - Transparency (e.g., press releases, detailed inflation reports)
  - Accountability (e.g., government involvement in setting targets, requirements to publicly explain failures)
- Price stability operational definition used in the paper:
  - 10 years of average inflation below 4 percent.

### Central bank self-reported commitment and discretion (selected regime averages from Fry and others, 2000; reporting countries in parentheses)
- Monetary nonautonomy (5): Exchange rate Commitment 100.0; Inflation Commitment 0.0; Discretion 0.0.
- Exchange rate peg (12): Exchange rate Commitment 66.8; Inflation Commitment 20.4; Discretion 36.4.
- Full-fledged inflation targeting (9): Exchange rate Commitment 10.4; Inflation Commitment 93.3; Discretion 12.1.
- Implicit price stability anchor (4): Exchange rate Commitment 31.3; Inflation Commitment 22.0; Discretion 54.5.
- Inflation targeting lite (17): Exchange rate Commitment 22.6; Inflation Commitment 48.4; Discretion 51.5.
- Weak anchor (4): Exchange rate Commitment 23.5; Inflation Commitment 42.3; Discretion 60.5.

### Regime prevalence and historical trends
- In 2003:
  - Nonautonomy: 9 countries.
  - Exchange rate peg: 21 countries.
  - Full-fledged inflation targeting: 20 countries.
  - Implicit price stability anchor: 5 countries.
  - Inflation targeting lite: 20 countries.
- Money anchor: used by 5 countries in 1990 and became extinct by 2000.
- Weak anchor countries decreased from 13 in 1990 to 0 in 2002.
- Over the past 15 years (1990–2003) reported in the paper:
  - The number of monetary nonautonomy countries almost doubled.
  - The share of countries with an exchange rate peg fell from one-half to one-quarter.
  - The share of full-fledged inflation targeters rose from nil to one-quarter.
- Advanced countries:
  - In 1990 two-thirds adhered to an exchange rate peg.
  - By 2003 almost all advanced countries use either full-fledged inflation targeting or implicit price stability anchoring (only one advanced country remained an exception—Denmark).
- Emerging market countries (1990 → 2003):
  - 1990: about one-half used exchange rate pegs and one-quarter had a weak anchor.
  - 2003: exchange rate pegs and inflation targeting lite each had about one-third share; remaining split about evenly between nonautonomous and full-fledged inflation targeting.

### Empirical regularities across regimes
- Inflation patterns (1990–2003, regimes excluding weak anchor for comparability):
  - Implicit price stability anchor countries have the lowest inflation (by definition).
  - Full-fledged inflation targeting countries have the next lowest inflation.
  - Money anchor countries (mostly advanced) show fairly low inflation.
  - Exchange rate peg countries show surprisingly higher inflation on average (reflecting adjustable/movable targets).
  - Inflation targeting lite countries exhibit a wide dispersion of inflation outcomes.
- Exchange rate movements (annual changes vis-à-vis the U.S. dollar):
  - Distributions of annual exchange rate changes do not vary across regimes as much as inflation rates.
  - Inflation is generally a better discriminator of regimes than U.S. dollar exchange rate movements.
- Commitment-discretion consistency:
  - Self-reported measures align with taxonomy: nonautonomy = highest commitment / lowest discretion; weak anchor and implicit price stability = lowest commitment / highest discretion; full-fledged inflation targeting = strongest inflation commitment and low discretion.

### Choice of regime: decision-tree framework (binary nodes)
- First node: monetary autonomy (retain an independent national currency) versus nonautonomy.
  - Nonautonomy favored when extreme price instability and large currency depreciation are present at adoption (high cost of exiting nonautonomy implies persistence).
  - Empirical evidence: nonautonomy adopters had very high percentile rankings of inflation and depreciation at adoption (median percentile ranking of inflation 99; currency depreciation 98; see Table 5).
- Second node: inflation targeting lite versus a strong anchor regime (exchange rate peg, full-fledged inflation targeting, implicit price stability anchor).
  - Choice depends on credibility to commit to a strong anchor and preconditions (size, development, financial depth, inflation record).
  - Inflation targeting lite countries tend to have lower GDP per capita, less developed financial sectors, higher dollarization, larger terms-of-trade shocks, and poorer inflation records.
- Third node: exchange rate peg versus strong inflation anchor (full-fledged inflation targeting or implicit price stability).
  - Exchange rate peg countries tend to have more closed capital accounts, higher dollarization, and more externally oriented trade flows; strong inflation anchor countries are larger, more developed, and have deeper financial sectors.
  - Regression findings: GDP (size) is the most robust predictor; higher dollarization is associated with higher probability of a fixed exchange rate.
- Fourth node: full-fledged inflation targeting versus implicit price stability anchor.
  - Implicit price stability anchor countries are larger, more developed, and have deeper and more active financial systems than full-fledged inflation targeters — enabling implicit commitment with greater discretion.
  - The paper suggests formal accountability is more necessary in full-fledged inflation targeting countries with shallower markets.

### Econometric and statistical evidence (high-level)
- Kolmogorov-Smirnov (KS) tests (selected results):
  - Inflation targeting lite versus strong anchor regime: GDP per capita KS stat. 0.46, P value 0.00; terms of trade volatility KS stat. 0.47, P value 0.01; dollarization KS stat. 0.44, P value 0.01.
  - Exchange rate peg versus strong inflation anchor: GDP KS stat. 0.65, P value 0.00; capital account openness KS stat. 0.47, P value 0.01; dollarization KS stat. 0.47, P value 0.01.
- Binomial probit regressions (summary):
  - Dependent variable =1 for inflation targeting lite (0 otherwise): log of per capita $GDP significantly negative (strong anchor associated with higher per capita GDP); lagged inflation positive and significant for lite classification.
  - Dependent variable =1 for exchange rate peg (0 otherwise): log of $GDP negative (strong inflation anchor associated with larger GDP); dollarization positively associated with peg probability.

### Policy implications and recommendations (from the paper)
- Regime switches should be evaluated in terms of commitment versus discretion tradeoffs and the country’s structural and historical circumstances.
- For an inflation targeting lite country considering a move to full-fledged inflation targeting:
  - Ensure the means for a high degree of clarity (transparency and accountability) in monetary policy implementation.
- Advanced countries: the main policy question is not the choice of anchor (most have adopted an inflation anchor) but the optimal degree of clarity of that anchor.
- For emerging markets: small differences in economic circumstances can lead to different regime choices; policy design should account for size, financial depth, dollarization, and terms-of-trade volatility.
- The taxonomy can inform refinements in transparency and accountability and anticipate emergence of intermediate regimes (e.g., between implicit price stability anchor and full-fledged inflation targeting).

### Research avenues highlighted
- Extend econometric analysis to explicitly test the decision-tree hypothesis for regime choice.
- Investigate the relationship between financial instability and regime choice.
- Explore how the taxonomy can improve understanding of how economic policies shape economic growth.
- Monitor possible emergence of new regimes along the clarity continuum (e.g., implicit → more explicit inflation commitments, or full-fledged targeters easing clarity to gain discretion).

*Source: _wp04191 - References (IMF working paper content provided).*

### 2003. For the monetary target the source is Cottarelli and Giannini (1997, Table A) for 1990-

### _wp04191 - 2003. For the monetary target the source is Cottarelli and Giannini (1997, Table A) for 1990-

### Definitions and classification rules for monetary regimes
- Exchange rate peg regime — Countries with an exchange rate arrangement classified by the IMF as: (i) conventional pegged arrangement, (ii) pegged exchange rate within horizontal band, or (iii) crawling peg. Sources: Bubula and Otker-Robe (2002) for 1990-2001, and the Exchange Arrangements and Exchange Restrictions report of IMF for 2002 and 2003.
- Full-fledged inflation targeting regime — Countries with publicly announced inflation target “parameters” (e.g., quantitative inflation target inflation index, the target range or point, and the policy horizon), a public explanation of the principal monetary policy operations and the indicators that best reflect the stance of monetary policy, announcement and explanations of changes in the stance of monetary policy and their relation to inflation, and an ex-post assessment of the performance of monetary policy to allow the central bank to be held accountable. Sources: Schaechter, Stone and Zelmer (2000) and Roger and Stone (2004).
  - Note: Hungary (2000-03), Israel (1999-2003), and Poland (1999) had an exchange rate peg, horizontal band or crawl exchange rate arrangement but were classified as full-fledged inflation targeters as the inflation target is assumed to take precedence.
- Implicit price stability anchor — Countries in t not included in any of the above regimes that have average inflation over t-9 to t of below 4 percent.
- Inflation targeting lite regime — The remaining countries.
- Monetary target sources and country examples for specific years:
  - Cottarelli and Giannini (1997, Table A) for 1990-94;
  - Hviding (1999) for Switzerland 1995-98 and Krajnyak (2001) for Switzerland 1999;
  - Jonsson (1999) for South Africa 1995-99;
  - Bank of Korea (1997 and 1996) for Korea for 1995-96;
  - Banca d’Italia (1998) for Italy 1995;
  - IMF (1999) for Guatemala for 1995.

### Correspondence between monetary regimes and IMF/Bubula & Otker-Robe exchange rate regimes
- Formal dollarization
  - No separate legal tender ↔ (IMF official exchange rate regimes)
- Currency union
  - Monetary nonautonomy ↔ (IMF official exchange rate regimes)
- Currency board arrangement
  - Currency board arrangement ↔ Currency board arrangements (Bubula and Otker-Robe)
- Conventional fixed peg vis-à-vis a single currency
  - Conventional pegged arrangement ↔ (Bubula and Otker-Robe mapping not explicitly repeated)
- Conventional fixed peg vis-à-vis a basket
  - Exchange rate peg
- Pegged exchange rate within horizontal band
  - Pegged exch. rate within horizontal band ↔ Horizontal band (Bubula and Otker-Robe)
- Crawling peg, forward looking
  - Crawling peg ↔ Crawling peg (Bubula and Otker-Robe)
- Crawling peg, backward looking
  - (Crawling peg variations mapped in Bubula and Otker-Robe)
- Full-fledged inflation targeting
  - Crawling band, forward looking ↔ (Bubula and Otker-Robe)
- Implicit price stability anchor
  - Crawling band ↔ Crawling band, backward looking (Bubula and Otker-Robe)
- Inflation targeting lite
  - Tightly managed floating ↔ Money anchor / Managed floating ↔ Other managed floating (Bubula and Otker-Robe)
- Weak anchor
  - ↔ Independently floating
  - Independently floating ↔ Independently floating (Bubula and Otker-Robe)

(Note: the original correspondence is presented as a mapping table between "Monetary regimes", "IMF official exchange rate regimes", and "Bubula and Otker-Robe exchange rate regimes". The bullets above preserve the terminology and correspondences as given.)

### Data documentation — indicators, periods, sources, and notes
- Level of development
  - GDP (in billions USD) — Average, 1990-99 — Source: WEO
  - GDP per capita (in 000’s USD) — Average, 1990-99 — Source: WEO
  - Trade flows (exports plus imports) to GDP — Average, 1990-99 — Source: WEO
- Real Shocks
  - Output gap volatility — Average, 1990-99 — Source: WEO — Standard deviation of output gap (percent of potential GDP).
  - Terms of trade volatility — Average, 1990-99 — Source: WEO — Standard deviation of the terms of trade.
- External
  - Current account balance to GDP — 1999-2000 — Source: WEO
  - Capital account openness — 1998 — Source: Lane and Milesi-Ferretti (2003)
  - Stocks of foreign assets and liabilities
  - Dollarization — 2001 — Source: De Nicolo, Honohan, and Ize (2003); Arteta (2002) — Foreign currency deposits to total deposits
- Financial stability
  - Currency crisis indicator — 1989-99 — Source: IFS — Weighted average of % change in reserves and % change in exchange rate. Threshold is chosen to be 1 st. deviation of index plus the mean. Weights are chosen to equalize the variances. (see WEO May 1998, page 77 footnote 1)
- Fiscal
  - Cumulative gov bal to GDP — 1990-2005 — Source: WEO — Cumulative General Govt. Balance
- Financial development
  - Broad money to GDP — Average, 1990-99 — Source: WEO
  - Standard mkt. cap to GDP — Average, 1990-99 — Source: WDI
- Nominal stability (monthly data)
  - CPI inflation, annual average — Average 1990-99 — Source: IFS
  - Nominal interest rate, average — 1997-2002 — Source: IFS
  - Exchange rate, standard deviation, monthly — 1999-2002 — Source: IFS
  - CPI inflation, standard deviation, monthly — 1999-2002 — Source: IFS
  - CPI inflation, monthly range — 1997-2002 — Source: IFS
  - Nominal interest rate, monthly range — 1997-2002 — Source: IFS
  - Exchange rate annual change, monthly range — 1997-2002 — Source: IFS
- Institutional
  - Freedom index — 2001/2002 — Source: Freedomhouse.org
  - Central bank inflation focus — 1999 — Source: Fry and others (2000)
  - Central bank exchange rate focus — 1999 — Source: Fry and others (2000)
  - Central bank discretion — 1999 — Source: Fry and others (2000)

### Figures and what they depict (as labeled)
- Figure 1. Monetary Regimes, Central Bank Self-Reported Policy Discretion and Commitment, 1999
  - Plots "Commitment to the nominal anchor" and "Discretion of monetary policy" for regime categories: Monetary nonautonomy, Exchange rate peg, Full-fledged inflation targeting, Implicit price stability anchor, Inflation targeting lite, Weak anchor.
  - Source: Fry and others (2000).
- Figure 2. Monetary Regimes, Larger and More Developed Countries, 1990–2003
  - Stacked series for 1990 through 2003 showing shares of: Inflation targeting lite; Implicit price stability anchor; Full-fledged inflation targeting; Exchange rate peg; Money anchor; Weak anchor; Monetary nonautonomy.
- Figure 3. Monetary Regimes, Inflation and Exchange Rate Changes, 1990-2003
  - 3a. Annual Average CPI Inflation, 1990-2003 — regime groups plotted (Monetary nonautonomy; Money anchor; Exchange rate peg; Full-fledged inflation targeting; Implicit price stability anchor; Inflation targeting lite).
  - 3b. Annual Average Change in the U.S. Dollar Exchange Rate, 1990-2003 — regime groups plotted (Monetary nonautonomy; Money anchor; Exchange rate peg; Full-fledged inflation targeting; Implicit price stability anchor; Inflation targeting lite).
  - Source: IFS.
- Figure 4. Monetary Regimes, Advanced Countries, 1990–2003
  - Stacked series for 1990 through 2003 showing shares of: Inflation targeting lite; Implicit price stability anchor; Full-fledged inflation targeting; Exchange rate peg; Money anchor.
- Figure 5. Monetary Regimes, Emerging Market Countries, 1990–2003
  - Stacked series for 1990 through 2003 showing shares of: Inflation targeting lite; Implicit price stability anchor; Full-fledged inflation targeting; Exchange rate peg; Money anchor; Weak anchor; Monetary nonautonomy.
- Figure 6. Discretion Index, Advanced and Emerging Markets, 1990–2003
  - Time series (1990–2003) of the Discretion Index for Advanced countries and Emerging market countries.
- Figure 7. Monetary Regime Decision Tree
  - Decision tree categories: Autonomous Monetary Regime; Nonautonomous Monetary Regime; Inflation Targeting Lite; Hard Nominal Anchor; Exchange Rate Peg; Inflation Anchor; Full-Fledged Inflation Targeting; Implicit price stability anchor.

### Key thematic takeaways (as represented in the source material)
- Monetary regimes are classified using a mix of de jure IMF classifications (e.g., conventional pegged arrangement, pegged exchange rate within horizontal band, crawling peg) and de facto indicators such as public inflation-targeting practices and historical inflation performance (average inflation over t-9 to t below 4 percent).
- Where an exchange rate arrangement and an inflation-targeting framework coexist, the inflation target is assumed to take precedence for classification (example countries: Hungary 2000-03; Israel 1999-2003; Poland 1999).
- The dataset and indicators combine macroeconomic averages over 1990-99 with higher-frequency monthly measures for nominal stability over 1997-2002 or 1999-2002, and incorporate institutional measures (e.g., Freedom index 2001/2002; central bank focus and discretion 1999).
- Correspondence between monetary regime labels and IMF/Bubula & Otker-Robe exchange rate regime taxonomies is explicitly mapped, reflecting overlaps and distinctions (e.g., currency board arrangements, horizontal bands, crawling pegs, managed floating, independently floating).

*Source: _wp04191 - 2003. For the monetary target the source is Cottarelli and Giannini (1997, Table A) for 1990-*

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