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Implementing Inflation Targeting: Institutional Arrangements, Target Design, and Communications

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Author Info

  • Marcel Peter
  • Scott Roger
  • Geoffrey Heenan

Abstract

Transparency is a central element in most aspects of the design and operation of inflation targeting regimes. This paper focuses on three elements of inflation targeting most closely associated with transparency: (i) the institutional arrangements supporting inflation targeting; (ii) the specification of the inflation target; and (iii) the central bank's policy communications. The paper is primarily aimed at providing practical advice to countries planning to develop an inflation targeting framework, but many of the issues are relevant for any credible, independent monetary policy.

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Bibliographic Info

Paper provided by International Monetary Fund in its series IMF Working Papers with number 06/278.

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Length: 57
Date of creation: 01 Dec 2006
Date of revision:
Handle: RePEc:imf:imfwpa:06/278

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Related research

Keywords: Inflation targeting;

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References

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  1. Eijffinger, S.C.W. & Geraats, P., 2006. "How transparent are central banks?," Open Access publications from Tilburg University urn:nbn:nl:ui:12-172467, Tilburg University.
  2. Scott Roger & Mark R. Stone, 2005. "On Target? The International Experience with Achieving Inflation Targets," IMF Working Papers 05/163, International Monetary Fund.
  3. JoAnne Morris & Tonny Lybek, 2004. "Central Bank Governance: A Survey of Boards and Management," IMF Working Papers 04/226, International Monetary Fund.
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  5. Clive Briault & Andrew Haldane & Mervyn King, 1996. "Independence and Accountability," Bank of England working papers 49, Bank of England.
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  8. Alain Ize, 2005. "Capitalizing Central Banks: A Net Worth Approach," IMF Working Papers 05/15, International Monetary Fund.
  9. Seth B. Carpenter, 2004. "Transparency and monetary policy: what does the academic literature tell policymakers?," Finance and Economics Discussion Series 2004-35, Board of Governors of the Federal Reserve System (U.S.).
  10. Guy Debelle & Stanley Fischer, 1994. "How independent should a central bank be?," Conference Series ; [Proceedings], Federal Reserve Bank of Boston, vol. 38, pages 195-225.
  11. Bernard Laurens & Marco Arnone & Jean-François Segalotto, 2006. "The Measurement of Central Bank Autonomy: Survey of Models, Indicators, and Empirical Evidence," IMF Working Papers 06/227, International Monetary Fund.
  12. Glenn D. Rudebusch & John C. Williams, 2006. "Revealing the secrets of the temple: the value of publishing central bank interest rate projections," Working Paper Series 2006-31, Federal Reserve Bank of San Francisco.
  13. Fischer, Stanley, 1995. "Central-Bank Independence Revisited," American Economic Review, American Economic Association, vol. 85(2), pages 201-06, May.
  14. Barro, Robert J. & Gordon, David B., 1983. "Rules, discretion and reputation in a model of monetary policy," Journal of Monetary Economics, Elsevier, vol. 12(1), pages 101-121.
  15. Anita Tuladhar, 2005. "Governance Structures and Decision-Making Roles in Inflation-Targeting Central Banks," IMF Working Papers 05/183, International Monetary Fund.
  16. Jorge Canales-Kriljenko & Turgut Kisinbay & Rodolfo Maino & Eric Parrado, 2006. "Setting the Operational Framework for Producing Inflation Forecasts," Working Papers Central Bank of Chile 362, Central Bank of Chile.
  17. Peter Stella, 2005. "Central Bank Financial Strength, Transparency, and Policy Credibility," IMF Staff Papers, Palgrave Macmillan, vol. 52(2), pages 335-365, September.
  18. Kydland, Finn E & Prescott, Edward C, 1977. "Rules Rather Than Discretion: The Inconsistency of Optimal Plans," Journal of Political Economy, University of Chicago Press, vol. 85(3), pages 473-91, June.
  19. Jérôme Vandenbussche, 2006. "Elements of Optimal Monetary Policy Committee Design," IMF Working Papers 06/277, International Monetary Fund.
  20. Douglas Laxton & Alasdair Scott & David Rose, 2009. "Developing a Structured Forecasting and Policy Analysis System to Support Inflation-Forecast Targeting (IFT)," IMF Working Papers 09/65, International Monetary Fund.
  21. Paul Jackman, 2002. "The Reserve Bank's external communications," Reserve Bank of New Zealand Bulletin, Reserve Bank of New Zealand, vol. 65, March.
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Citations

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Cited by:
  1. Jorge Iván Canales-Kriljenko & Luis I. Jácome H. & Ali Alichi & Ivan Luis de Oliveira Lima, 2011. "Sorteando la tormenta mundial: beneficios de la reforma de política monetaria en cinco países latinoamericanos," Boletín, Centro de Estudios Monetarios Latinoamericanos, vol. 0(4), pages 194-226, Octubre-d.
  2. Mordecai Avriel & Jens Hilscher & Alon Raviv, 2012. "Inflation Derivatives Under Inflation Target Regimes," Working Papers 43, Brandeis University, Department of Economics and International Businesss School.
  3. Pierre L. Siklos, 2008. "Inflation Targeting Around the World," Emerging Markets Finance and Trade, M.E. Sharpe, Inc., vol. 44(6), pages 17-37, November.
  4. Petreski, Marjan, 2013. "Inflation targeting at the crossroads: Evidence from post-communist economies during the crisis," MPRA Paper 47018, University Library of Munich, Germany.
  5. International Monetary Fund, 2010. "Weathering the Global Storm: The Benefits of Monetary Policy Reform in the LA5 Countries," IMF Working Papers 10/292, International Monetary Fund.
  6. Jenish Nurbek & Kyrgyzbaeva Asel, 2012. "On the Possibility of Inflation Targeting in Kyrgyzstan," EERC Working Paper Series 12/10e, EERC Research Network, Russia and CIS.
  7. Ales Bulir & Katerina Smídková, 2008. "Striving to Be "Clearly Open" and "Crystal Clear": Monetary Policy Communication of the CNB," IMF Working Papers 08/84, International Monetary Fund.
  8. Diewert, Erwin, 2007. "The Ottawa Group after Ten Meetings: Future Priorities," Economics working papers diewert-07-11-16-12-30-23, Vancouver School of Economics, revised 16 Nov 2007.
  9. Alexandra Peter & Sarwat Jahan & Edward R. Gemayel, 2011. "What Can Low-Income Countries Expect from Adopting Inflation Targeting?," IMF Working Papers 11/276, International Monetary Fund.
  10. Héctor Cuasquer & René Maldonado, 2011. "Microfinanzas y microcrédito en Latinoamérica," Boletín, Centro de Estudios Monetarios Latinoamericanos, vol. 0(4), pages 179-193, Octubre-d.

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