Inflation Targeting in Practice

March 1, 1997

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

In recent years, an inflation targeting framework for monetary policy has been adopted in a number of industrial countries. This paper discusses the practical issues that have arisen under the operation of the new framework, and highlights five features of the framework: the assignment of the target, the interaction with other policy goals, the definition of the target, accountability and the role of inflation forecasts. The economic performance of the inflation targeting countries thus far is summarized.

Subject: Banking, Consumer price indexes, Economic forecasting, Inflation, Inflation targeting, Monetary policy, Price stabilization, Prices

Keywords: Australia and New Zealand, Consumer price indexes, CPI inflation rate, Inflation, inflation expectation, inflation rate, inflation target band width, Inflation Targeting, inflation targeting framework, monetary policy, monetary policy credibility, monetary policy decision, Monetary Policy Framework, monetary policy response, monetary policy statement, Price stabilization, rate of inflation, reaction function, target band, target inflation rate, WP

Pages:
34
Volume:
1997
DOI:
https://doi.org/10.5089/9781451845310.001
Issue:
035
Series:
Working Paper No. 1997/035
Stock No:
WPIEA0351997
ISBN:
9781451845310
ISSN:
1018-5941

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