It Framework Design Parameters

Author/Editor:

Douglas Laxton ; Charles Freedman

Publication Date:

April 1, 2009

Electronic Access:

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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:

This is the third chapter of a forthcoming monograph entitled "On Implementing Full-Fledged Inflation-Targeting Regimes: Saying What You Do and Doing What You Say." It examines a number of elements in the design of an inflation-targeting framework. These include the definition of the target variable, the relevance of core measures of inflation, and the advantages and disadvantages of point targets, point targets with a band, and range targets. It then discusses the choice of a long-term inflation rate, the target horizon, and the policy horizon.

Series:

Working Paper No. 2009/087

Subject:

Consumer price indexes Economic theory Inflation Inflation targeting Monetary policy Output gap Prices Production Supply shocks

English

Publication Date:

April 1, 2009

ISBN/ISSN:

9781451872347/1018-5941

Stock No:

WPIEA2009087

Pages:

16

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