Why Inflation Targeting?
IMF Working Papers, April 1, 2009
Source details
- Canonical URL
- Why Inflation Targeting?
Other formats
Bibliographic details
- Authors: Charles Freedman, Douglas Laxton
- Published: April 1, 2009
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781451872330.001
Overview
- Chapter 2 of a forthcoming monograph entitled "On Implementing Full-Fledged Inflation-Targeting Regimes: Saying What You Do and Doing What You Say."
- Authors: Charles Freedman, Douglas Laxton
- Publication date: April 1, 2009
Main findings and analytical focus
- Discusses the costs of inflation, including their role in generating boom-bust cycles.
- Presents a general discussion of the need for a nominal anchor.
- Describes a specific type of monetary anchor: the inflation-targeting regime.
- Identifies two key intellectual roots of inflation targeting:
- the absence of long-run trade-offs
- the time-inconsistency problem
- Concludes with a brief introduction to the way in which inflation targeting works.
Subjects and keywords
- Subject: Conventional peg, Economic theory, Foreign exchange, Inflation, Inflation targeting, Monetary policy, Output gap, Prices, Production, Supply shocks
- Keywords: Africa, Conventional peg, core rate, demand shock, feedback rule, Global, Inflation, inflation equation, inflation expectation, Inflation Targeting, inflation targeting adoption, inflation-targeting regime, Monetary Policy, Output gap, output-inflation process, Supply shocks, targeted rate of inflation, WP