Preliminary Considerations of an Inflation Targeting Framework for the Philippines
March 1, 1998
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Summary
Monetary policy in the Philippines has had multiple objectives. Moreover, shifts in money demand and the money multiplier have made base money a less reliable anchor for monetary policy. Hence, on present policies, a steady reduction in inflation is not assured, and changes to the monetary policy framework should be considered. This paper reviews the benefits as well as the constraints of an inflation targeting framework and the necessary preconditions--both in terms of the institutional infrastructure and the appropriate inflation target--for its successful implementation, including the ability to forecast inflation reasonably well over policy-relevant time horizons.
Subject: Banking, Economic forecasting, Exchange rates, Foreign exchange, Inflation, Inflation targeting, Monetary base, Monetary policy, Money, Prices
Keywords: central bank charter, central bank governor, Exchange rates, Inflation, inflation development, inflation expectation, inflation feedback rule, inflation objective, inflation process, inflation rate, Inflation targeting, Monetary base, monetary policy decision, monetary policy strategy, nominal exchange rate, output gap, practice inflation targeting, rate of inflation, WP
Pages:
30
Volume:
1998
DOI:
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Issue:
039
Series:
Working Paper No. 1998/039
Stock No:
WPIEA0391998
ISBN:
9781451845808
ISSN:
1018-5941
