{
  "title": "Taylor Visits Africa",
  "publication": "IMF Working Papers, December 9, 2015",
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  "summary": "Many low-income countries do not use interest rates as their main monetary policy instrument. In East Africa, for instance, targeting money aggregates has been pretty much the rule rather than the exception.",
  "sections": [
    {
      "heading": "Summary and main findings",
      "content": "- Many low-income countries do not use interest rates as their main monetary policy instrument.\n- In East Africa, targeting money aggregates \"has been pretty much the rule rather than the exception.\"\n- Money aggregate targets are seldom met and often readjusted according to the economic environment, opening the possibility that central banks are de facto pursuing a strategy more akin to a Taylor Rule.\n- Estimations of small-scale models for Kenya, Uganda and Tanzania suggest:\n  - These self-styled \"monetary targeters\" are respecting the Taylor Principle, that is are on average increasing nominal interest rates more than proportionally to inflation.\n  - Steep deviations from the Taylor Rule have taken place in Kenya and Tanzania.\n  - In Uganda, these errors are much smaller, in fact similar in size to Taylor Rule deviations found for Brazil.\n  - Uganda’s deviations are smaller than South Africa’s, the continent’s sole long-term inflation targeter."
    },
    {
      "heading": "Methodology and scope",
      "content": "- Analysis based on estimations of small-scale models for Kenya, Uganda and Tanzania.\n- Focus on de facto policy behavior where explicit monetary targeting exists but targets are frequently missed or adjusted."
    },
    {
      "heading": "Policy-relevant observations",
      "content": "- Adjustments and frequent misses of money-aggregate targets imply that central banks that nominally target aggregates may effectively follow interest-rate based rules.\n- Respecting the Taylor Principle indicates nominal interest rates are increased more than proportionally to inflation on average in the sampled East African countries.\n- Large deviations in some countries (Kenya and Tanzania) point to episodes of significant departure from rule-like behavior; smaller deviations in Uganda suggest relative policy consistency comparable to Brazil and better than South Africa in the sample.\n\n---\n\n Content in this bundle\n\n- Taylor Visits Africa; by Carlos Eduardo Goncalves; IMF Working Paper WP/15/258; December 2015\n  - Taylor Visits Africa; by Carlos Eduardo Goncalves; IMF Working Paper WP/15/258; December 2015 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Taylor Visits Africa; by Carlos Eduardo Goncalves; IMF Working Paper WP/15/258; December 2015 (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2016/12/31/taylor-visits-africa-43447"
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    "Authors: Carlos Goncalves",
    "Published: December 9, 2015",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781513560540.001",
    "Many low-income countries do not use interest rates as their main monetary policy instrument.",
    "In East Africa, targeting money aggregates \"has been pretty much the rule rather than the exception.\"",
    "Money aggregate targets are seldom met and often readjusted according to the economic environment, opening the possibility that central banks are de facto pursuing a strategy more akin to a Taylor Rule.",
    "Estimations of small-scale models for Kenya, Uganda and Tanzania suggest:",
    "Analysis based on estimations of small-scale models for Kenya, Uganda and Tanzania.",
    "Focus on de facto policy behavior where explicit monetary targeting exists but targets are frequently missed or adjusted.",
    "Adjustments and frequent misses of money-aggregate targets imply that central banks that nominally target aggregates may effectively follow interest-rate based rules.",
    "Respecting the Taylor Principle indicates nominal interest rates are increased more than proportionally to inflation on average in the sampled East African countries.",
    "Large deviations in some countries (Kenya and Tanzania) point to episodes of significant departure from rule-like behavior; smaller deviations in Uganda suggest relative policy consistency comparable to Brazil and better than South Africa in the sample.",
    "**Taylor Visits Africa; by Carlos Eduardo Goncalves; IMF Working Paper WP/15/258; December 2015**"
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