Monetary Policy under Flexible Exchange Rates : An Introduction to Inflation Targeting

In the past few years, a number of central banks have adopted inflation targeting for monetary policy. The author provides an introduction to inflation targeting, with an emphasis on analytical issues, and the recent experience of middle- and high-income developing countries (which have relatively l...

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Bibliographic Details
Main Author:	Agenor, Pierre-Richard
Format:	Policy Research Working Paper
Language:	en_US
Published:	World Bank, Washington, DC 2014
Subjects:	actual inflation aggregate demand aggregate supply aggregate supply curve autoregression bank lending capital flight capital markets central bank Central Bank Independence central banks closed economy competitiveness Conceptual Framework consumers debt demand for money destabilizing effect developing economies discount rate disinflation Economic Policy economists elasticity equilibrium exchange rate exchange rate crises exchange rates financial markets financial structure financial system floating exchange rates forecasting inflation forecasts foreign shocks general level of prices government spending income income developing countries increase in inflation indirect instruments Industrial Countries inflation inflation forecasts inflation rate inflation rates inflation target inflation targeting inflation targeting framework inflation targeting regime inflation targets inflationary pressures institutional framework Interest Rates intermediate goods intermediate inputs lending rates long term low inflation macroeconomic models metals monetary aggregate Monetary policy Monetary targeting money demand money growth money supply nominal anchor nominal exchange rate nominal interest rate open economies optimization Phillips curve policy decisions policy instruments POLICY RESEARCH Policy Trade-offs potential output Poverty Reduction price changes price inflation price level price setting price stability private agents private consumption public debt rate of inflation rate targeting real exchange real exchange rate real interest real interest rate reduction in inflation relative price risk premia savings short-term interest rates stable inflation stable rate standard deviation tradable goods transmission mechanism transmission process unemployment variable inflation wages wealth
Online Access:	http://hdl.handle.net/10986/19967

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http://hdl.handle.net/10986/19967

Monetary Policy under Flexible Exchange Rates : An Introduction to Inflation Targeting

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