Inflation Targeting in Korea: An Empirical Exploration
January 1, 1999
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Summary
The revised Bank of Korea Act states that the primary goal of monetary policy is price stability, suggesting that monetary policy will move toward an inflation-targeting framework. The paper explores some of the practical aspects of this move, including such issues as the predictability of inflation, the definition of the price index, the inflation target’s time horizon, and the width of the inflation-target bands. On balance, the empirical evidence suggests that Korea is likely to be successful in adopting an inflation-targeting framework over the medium term.
Subject: Economic forecasting, Inflation, Inflation targeting, Monetary base, Monetary policy, Monetary policy frameworks, Money, Prices
Keywords: agents inflation expectation, exchange rate, food price inflation shock, Inflation, inflation outcome, Inflation Targeting, IT country, IT experiment, IT framework, IT simulation, Korea, Monetary base, Monetary policy frameworks, price index, real interest rate, standard deviation, target band, target horizon, transmission lag, WP
Pages:
55
Volume:
1999
DOI:
Issue:
007
Series:
Working Paper No. 1999/007
Stock No:
WPIEA0071999
ISBN:
9781451842395
ISSN:
1018-5941
