{
  "title": "The Journey to Inflation Targeting: Easier Said than Done The Case for Transitional Arrangements along the Road",
  "publication": "IMF Working Papers, June 25, 2015",
  "sourceUrl": "https://www.imf.org/en/publications/wp/issues/2016/12/31/the-journey-to-inflation-targeting-easier-said-than-done-the-case-for-transitional-43029",
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  "summary": "Countries with evolving monetary regimes that decide to embark on “the Journey to inflation targeting” may not be able to adopt a full-fledged inflation targeting regime immediately.",
  "sections": [
    {
      "heading": "Summary",
      "content": "- Countries with evolving monetary regimes that decide to embark on “the Journey to inflation targeting” may not be able to adopt a full-fledged inflation targeting regime immediately.\n- Those countries would be better off adopting transitional arrangements that:\n  - take advantage of the informational content of monetary aggregates,\n  - develop an economic analysis capacity, and\n  - concentrate on monetary operations aimed at steering money market interest rates.\n- This approach would allow the central bank to:\n  - buy time for developing the building blocks for effective monetary policy,\n  - support transparent central bank communication, and\n  - limit the potential for undesirable outcomes along the road."
    },
    {
      "heading": "Key findings",
      "content": "- Transitional arrangements are preferable to immediate adoption of full-fledged inflation targeting for countries with evolving monetary regimes.\n- Monetary aggregates contain informational content useful during the transition.\n- Strengthening economic analysis capacity is an essential component of the transition.\n- Focusing on monetary operations to steer money market interest rates supports the transition process.\n- Transparent central bank communication plays a key role in limiting undesirable outcomes."
    },
    {
      "heading": "Policy recommendations",
      "content": "- Adopt transitional arrangements rather than immediate full-fledged inflation targeting where appropriate.\n- Use monetary aggregates as part of the informational framework during the transition.\n- Develop analytical capacity within the central bank to support policy decisions.\n- Concentrate monetary operations on steering money market interest rates to facilitate monetary policy implementation.\n- Enhance transparency in central bank communication to manage expectations and limit undesirable outcomes."
    },
    {
      "heading": "Implementation considerations",
      "content": "- Transitional arrangements provide time to develop the necessary building blocks for effective monetary policy.\n- Central banks should align balance sheet management and operational frameworks to support steering of short term interest rates.\n- The transition requires coordinated effort across institutional functions, including central bank independence and communication strategies.\n\n---\n\n Content in this bundle\n\n- wp15136\n  - wp15136 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - wp15136 (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2016/12/31/the-journey-to-inflation-targeting-easier-said-than-done-the-case-for-transitional-43029"
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    "Authors: Bernard J Laurens, Kelly Eckhold, Darryl King, Nils Øyvind Mæhle, Abdul Naseer, Alain Durré",
    "Published: June 25, 2015",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781513567990.001",
    "Countries with evolving monetary regimes that decide to embark on “the Journey to inflation targeting” may not be able to adopt a full-fledged inflation targeting regime immediately.",
    "Those countries would be better off adopting transitional arrangements that:",
    "This approach would allow the central bank to:",
    "Transitional arrangements are preferable to immediate adoption of full-fledged inflation targeting for countries with evolving monetary regimes.",
    "Monetary aggregates contain informational content useful during the transition.",
    "Strengthening economic analysis capacity is an essential component of the transition.",
    "Focusing on monetary operations to steer money market interest rates supports the transition process.",
    "Transparent central bank communication plays a key role in limiting undesirable outcomes.",
    "Adopt transitional arrangements rather than immediate full-fledged inflation targeting where appropriate.",
    "Use monetary aggregates as part of the informational framework during the transition.",
    "Develop analytical capacity within the central bank to support policy decisions.",
    "Concentrate monetary operations on steering money market interest rates to facilitate monetary policy implementation.",
    "Enhance transparency in central bank communication to manage expectations and limit undesirable outcomes.",
    "Transitional arrangements provide time to develop the necessary building blocks for effective monetary policy.",
    "Central banks should align balance sheet management and operational frameworks to support steering of short term interest rates.",
    "The transition requires coordinated effort across institutional functions, including central bank independence and communication strategies.",
    "**_wp15136**"
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