## Inflation Pressures and Monetary Policy Options in Emerging and Developing Countries—A Cross Regional Perspective

_IMF Working Papers, January 1, 2009_

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**Canonical URL:** [Inflation Pressures and Monetary Policy Options in Emerging and Developing Countries—A Cross Regional Perspective](https://www.imf.org/en/publications/wp/issues/2016/12/31/inflation-pressures-and-monetary-policy-options-in-emerging-and-developing-countries-a-cross-22496)

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## Bibliographic details
- Authors: Inci Ötker, David Vávra, Francisco F. Vazquez, Luis Ignacio Jácome, Karl F Habermeier, Kotaro Ishi, Alessandro Giustiniani, Turgut Kisinbay
- Published: January 1, 2009
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781451871487.001

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### Summary / Scope
- Analyzes the monetary policy response to rising inflation in emerging and developing countries associated with the food and oil price shocks in 2007 and the first half of 2008.
- Reviews inflation developments in a sample of countries covering all regions and a broad range of monetary and exchange rate policy regimes.
- Discusses underlying causes of inflation.
- Provides a synthesis of policy responses taken against the background of:
  - conflicting objectives and trade-offs,
  - uncertainties regarding the nature of the shocks,
  - additional challenges brought on by the global financial turmoil.
- Presents considerations for policy.

### Core findings and analysis themes
- Examination of inflation developments across countries with varied monetary and exchange rate regimes.
- Identification and discussion of underlying causes of the 2007–first half of 2008 inflation episodes, including food and oil price shocks.
- Synthesis of the range of policy responses implemented by authorities in emerging and developing countries during the shocks and ensuing turmoil.
- Emphasis on the role of inflation expectations, aggregate demand, and monetary frameworks (including inflation targeting and conventional pegs) in shaping policy choices.

### Policy trade-offs and responses
- Highlights conflicting objectives and trade-offs faced by policymakers confronting supply shocks and rising inflation.
- Discusses the uncertainty about whether shocks were predominantly supply-driven or demand-driven and the implications for monetary policy.
- Reviews policy tools and responses across different monetary and exchange rate regimes; situational considerations include:
  - the nature of the inflation shock,
  - exchange rate policy stance,
  - monetary policy framework (including IT country practices),
  - financial market developments stemming from global financial turmoil.

### Considerations for policy
- Presents considerations for how policymakers might respond to similar inflation pressures, taking into account:
  - regime-specific constraints and objectives,
  - the need to assess inflation expectations and aggregate demand conditions,
  - the interaction between exchange rate policy and domestic monetary policy.

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_Source: https://www.imf.org/en/publications/wp/issues/2016/12/31/inflation-pressures-and-monetary-policy-options-in-emerging-and-developing-countries-a-cross-22496_