Inflation-Forecast Targeting: Applying the Principle of Transparency
Electronic Access:
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Summary:
Many central banks in emerging and advanced economies have adopted an inflation-forecast targeting (IFT) approach to monetary policy, in order to successfully establish a stable, low-inflation environment. To support policy making, each has developed a structured system of forecasting and policy analysis appropriate to its needs. A common component is a model-based forecast with an endogenous policy interest rate path. The approach is characterized, among other things, by transparent communications—some IFT central banks go so far as to publish their policy interest rate projection. Some elements of this regime, although a work still in progress, are worthy of consideration by central banks that have not yet officially adopted full-fledged inflation targeting.
Series:
Working Paper No. 2015/132
Subject:
Banking Central bank policy rate Financial services Inflation Inflation targeting Monetary policy Output gap Prices Production Real interest rates
Notes:
English
Publication Date:
June 24, 2015
ISBN/ISSN:
9781513557656/1018-5941
Stock No:
WPIEA2015132
Pages:
56
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