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An Overview of Inflation-Targeting Frameworks: Institutional Arrangements, Decision-making, & the Communication of Monetary Policy

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  • Alberto Naudon
  • Andrés Pérez

Abstract

The main objective of this study is to contribute to the public understanding of the inflationtargeting (IT) framework currently being implemented in several leading central banks. We do so by discussing differences in the institutional set up, the decision-making process, and the communication of monetary policy. We analyze these aspects from a conceptual perspective and review them in practice by referring to a set of eleven “small, open” OECD economies as well as four major central banks of the world (Bank of England, Bank of Japan, European Central Bank, & the Federal Reserve). We pay specific attention to recent changes along the multiple dimensions that have, on balance, aimed at further strengthening the IT framework.

Suggested Citation

  • Alberto Naudon & Andrés Pérez, 2017. "An Overview of Inflation-Targeting Frameworks: Institutional Arrangements, Decision-making, & the Communication of Monetary Policy," Working Papers Central Bank of Chile 811, Central Bank of Chile.
    • Handle: RePEc:chb:bcchwp:811
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    Cited by:

    1. Rania A. Al-Mashat & Mr. Ales Bulir & N. Nergiz Dinçer & Tibor Hlédik & Mr. Tomás Holub & Asya Kostanyan & Mr. Douglas Laxton & Armen Nurbekyan & Mr. Rafael A Portillo & Hou Wang, 2018. "An Index for Transparency for Inflation-Targeting Central Banks: Application to the Czech National Bank," IMF Working Papers 2018/210, International Monetary Fund.
    2. Ginn, William & Pourroy, Marc, 2020. "Should a central bank react to food inflation? Evidence from an estimated model for Chile," Economic Modelling, Elsevier, vol. 90(C), pages 221-234.
    3. Pedersen, Michael, 2018. "Credit risk and monetary pass-through—Evidence from Chile," Journal of Financial Stability, Elsevier, vol. 36(C), pages 144-158.
    4. Joanna Niedźwiedzińska, 2018. "Inflation Targeting. Institutional features of the strategy in practice," NBP Working Papers 299, Narodowy Bank Polski.
    5. Joanna Niedźwiedzińska, 2020. "Inflation Targets – What Factors Can Help to Explain Their Levels," Central European Journal of Economic Modelling and Econometrics, Central European Journal of Economic Modelling and Econometrics, vol. 12(1), pages 47-89, March.

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