Inflation Targeting as a Framework for Monetary Policy

Economic Issues, October 2, 1998

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Inflation Targeting as a Framework for Monetary Policy

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Bibliographic details

• Authors: Guy Debelle, Miguel A Savastano, Paul R Masson, Sunil Sharma
• Published: October 2, 1998
• Series: Economic Issues
• DOI: https://doi.org/10.5089/9781557757616.051

Summary

• Inflation distorts prices, erodes savings, discourages investment, stimulates capital flight, inhibits growth, and makes economic planning a nightmare.
• Several advanced economies adopted "inflation targeting" during the past decade as a monetary policy approach to control inflation.
• The pamphlet explains:
  • the requirements of putting inflation targeting in place,
  • the experience of countries that have tried it,
  • whether inflation targeting has applicability to developing countries.

Authors and Publication

• Authors: Guy Debelle, Miguel A Savastano, Paul R Masson, Sunil Sharma
• Publication date: October 2, 1998
• Series: Economic Issues No. 1998/005
• Issue: 005
• Volume: 1998

Core findings and analysis

• Inflation has wide-ranging negative effects on economies, including on prices, savings, investment, capital flows, growth, and economic planning.
• Inflation targeting emerged as a distinct monetary policy framework adopted by several advanced economies in the decade preceding publication.
• The pamphlet addresses both practical implementation requirements and empirical experiences from countries that implemented inflation targeting.

Requirements for implementing inflation targeting (as described)

• The pamphlet explains the institutional and operational requirements for putting inflation targeting into place (details summarized in the pamphlet itself).

Applicability to developing countries

• The pamphlet examines whether the inflation-targeting framework has applicability to developing countries, considering the experiences and requirements discussed.

Subjects and keywords (as listed)

• Subjects: Banking, Exchange rates, Foreign exchange, Inflation, Inflation targeting, Monetary policy, Monetary policy frameworks, Monetary policy instruments, Prices
• Keywords: Africa, country, EI, Exchange rates, government, government operation, Inflation, inflation expectation, Inflation targeting, inflation-targeting approach, inflation-targeting country, inflation-targeting system, monetary policy credibility, Monetary policy frameworks, Monetary policy instruments, monetary policy setting, monetary policy statement, price level