IMF Staff Country Reports

This Selected Issues paper examines Israel’s monetary policy regime with an eye toward developing some understanding of why breaches have been occurring and how to address them. The paper provides a brief history of Israel’s experience with inflation and inflation targeting. It examines several institutional aspects of inflation targeting and compares Israel with other emerging market regimes. Various procedural issues associated with implementing an inflation-targeting regime in Israel are examined. The paper also analyzes active labor market policies in Israel.