Credibility and Inflation Targeting in an Emerging Market: The Case of Chile
AbstractWhen the monetary authority lacks credibility it faces a larger trade-off between output and inflation. This poses important challenges for the implementation and design of an inflation targeting regime and an inflation stabilization process. In this paper we show how these challenges have determined different implementation phases of an inflation targeting regime in Chile, and how imperfect credibility is consistent with the different features of the disinflationary process followed by Chile during the 90s.
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Bibliographic InfoPaper provided by Central Bank of Chile in its series Working Papers Central Bank of Chile with number 312.
Date of creation: Apr 2005
Date of revision:
This paper has been announced in the following NEP Reports:
- NEP-ALL-2005-04-24 (All new papers)
- NEP-CBA-2005-04-24 (Central Banking)
- NEP-LAM-2005-04-24 (Central & South America)
- NEP-MAC-2005-04-24 (Macroeconomics)
- NEP-MON-2005-04-24 (Monetary Economics)
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