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Challenges for Inflation Targeting in Emerging Market Countries


  • Frederic S. Mishkin


In the past decade, numerous emerging market countries have adopted inflation targeting as their basic monetary policy strategy. The institutional framework in many emerging market countries that affects monetary policy outcomes has generally differed from that in advanced countries. This paper first outlines what traditionally has made emerging market and other developing economies different from advanced countries and what challenges these differences have presented to those that adopted inflation targeting. The paper then examines whether, given these challenges, inflation targeting has been a success in emerging market countries.

Suggested Citation

  • Frederic S. Mishkin, 2008. "Challenges for Inflation Targeting in Emerging Market Countries," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 44(6), pages 5-16, November.
  • Handle: RePEc:mes:emfitr:v:44:y:2008:i:6:p:5-16

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    References listed on IDEAS

    1. Guillermo A. Calvo & Carmen M. Reinhart, 2002. "Fear of Floating," The Quarterly Journal of Economics, Oxford University Press, vol. 117(2), pages 379-408.
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    4. Calvo, Guillermo A, 2001. "Capital Markets and the Exchange Rate with Special Reference to the Dollarization Debate in Latin America," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 33(2), pages 312-334, May.
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    7. Forder, James, 2000. "Central Bank Independence and Credibility: Is There a Shred of Evidence?: Review," International Finance, Wiley Blackwell, vol. 3(1), pages 167-185, April.
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    Cited by:

    1. Marco Airaudo & Edward F Buffie & Luis-Felipe Zanna, 2016. "Inflation Targeting and Exchange Rate Management In Less Developed Countries," IMF Working Papers 16/55, International Monetary Fund.
    2. Sean J. Gossel & Nicholas Biekpe, 2013. "The Cyclical Relationships Between South Africa's Net Capital Inflows and Fiscal and Monetary Policies," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 49(2), pages 64-83, March.
    3. Tomislav Globan & Vladimir Arčabić & Petar Sorić, 2016. "Inflation in New EU Member States: A Domestically or Externally Driven Phenomenon?," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 52(1), pages 154-168, January.
    4. Akyurek, Cem & Kutan, Ali M. & Yilmazkuday, Hakan, 2011. "Can inflation targeting regimes be effective in developing countries? The Turkish experience," Journal of Asian Economics, Elsevier, vol. 22(5), pages 343-355, October.
    5. Brada & Kubíček & Kutan & Tomšík, 2015. "Inflation Targeting: Insights from Behavioral Economics," Eastern European Economics, Taylor & Francis Journals, vol. 53(5), pages 357-376, September.
    6. C C Tsong & A Hachicha, 2014. "Revisiting the Fisher Hypothesis for Several Selected Developing Economies: a Quantile Cointegration Approach," Economic Issues Journal Articles, Economic Issues, vol. 19(1), pages 57-72, March.
    7. repec:mes:eaeuec:v:53:y:2015:i:5:p:357-376 is not listed on IDEAS
    8. Valera, Harold Glenn A. & Holmes, Mark J. & Hassan, Gazi M., 2017. "How credible is inflation targeting in Asia? A quantile unit root perspective," Economic Modelling, Elsevier, vol. 60(C), pages 194-210.
    9. Ivrendi, Mehmet & Guloglu, Bulent, 2010. "Monetary shocks, exchange rates and trade balances: Evidence from inflation targeting countries," Economic Modelling, Elsevier, vol. 27(5), pages 1144-1155, September.
    10. de Guimarães e Souza, Gustavo José & de Mendonça, Helder Ferreira & de Andrade, Joaquim Pinto, 2016. "Inflation targeting on output growth: A pulse dummy analysis of dynamic macroeconomic panel data," Economic Systems, Elsevier, vol. 40(1), pages 145-169.
    11. repec:eee:quaeco:v:66:y:2017:i:c:p:21-49 is not listed on IDEAS
    12. Bedri Kamil Onur Tas & Ishak Demir, 2014. "Keep your Word: Time-varying Inflation Targets and Inflation Targeting Performance," Manchester School, University of Manchester, vol. 82(2), pages 160-182, March.
    13. Daniela Magalhães Prates & Luiz Fernanda De Paula & Barbara Fritz, 2016. "Keynes At The Periphery: Currency Hierarchy And Challenges For Economic Policy In Emerging Economies," Anais do XLII Encontro Nacional de Economia [Proceedings of the 42ndd Brazilian Economics Meeting] 110, ANPEC - Associação Nacional dos Centros de Pósgraduação em Economia [Brazilian Association of Graduate Programs in Economics].
    14. Tsong, Ching-Chuan & Lee, Cheng-Feng, 2011. "Asymmetric inflation dynamics: Evidence from quantile regression analysis," Journal of Macroeconomics, Elsevier, vol. 33(4), pages 668-680.
    15. Singleton,John, 2010. "Central Banking in the Twentieth Century," Cambridge Books, Cambridge University Press, number 9780521899093, March.
    16. Rene Coppe Pimentel & Taufiq Choudhry, 2014. "Stock Returns Under High Inflation and Interest Rates: Evidence from the Brazilian Market," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 50(1), pages 71-92, January.
    17. Tomislav Globan & Vladimir Arčabić & Petar Sorić, 2016. "Inflation in New EU Member States: A Domestically or Externally Driven Phenomenon?," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 52(1), pages 154-168, January.
    18. Ayres, Kelly & Belasen, Ariel R. & Kutan, Ali M., 2014. "Does inflation targeting lower inflation and spur growth?," Journal of Policy Modeling, Elsevier, vol. 36(2), pages 373-388.
    19. repec:eee:jimfin:v:81:y:2018:i:c:p:159-184 is not listed on IDEAS
    20. Cevik, Emrah Ismail & Dibooglu, Sel & Kutan, Ali M., 2014. "Monetary and fiscal policy interactions: Evidence from emerging European economies," Journal of Comparative Economics, Elsevier, vol. 42(4), pages 1079-1091.


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