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It Framework Design Parameters

Author

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  • Douglas Laxton
  • Charles Freedman

Abstract

This is the third chapter of a forthcoming monograph entitled "On Implementing Full-Fledged Inflation-Targeting Regimes: Saying What You Do and Doing What You Say." It examines a number of elements in the design of an inflation-targeting framework. These include the definition of the target variable, the relevance of core measures of inflation, and the advantages and disadvantages of point targets, point targets with a band, and range targets. It then discusses the choice of a long-term inflation rate, the target horizon, and the policy horizon.

Suggested Citation

  • Douglas Laxton & Charles Freedman, 2009. "It Framework Design Parameters," IMF Working Papers 09/87, International Monetary Fund.
  • Handle: RePEc:imf:imfwpa:09/87
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    File URL: http://www.imf.org/external/pubs/cat/longres.aspx?sk=22877
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    References listed on IDEAS

    as
    1. Charles Freedman & Douglas Laxton, 2009. "Why Inflation Targeting?," IMF Working Papers 09/86, International Monetary Fund.
    2. Isard, Peter & Laxton, Douglas & Eliasson, Ann-Charlotte, 2001. "Inflation targeting with NAIRU uncertainty and endogenous policy credibility," Journal of Economic Dynamics and Control, Elsevier, vol. 25(1-2), pages 115-148, January.
    3. Scott Roger & Mark R. Stone, 2005. "On Target? the International Experience with Achieving Inflation Targets," IMF Working Papers 05/163, International Monetary Fund.
    4. Refet S. Gürkaynak & Brian P. Sack & Eric T. Swanson, 2003. "The excess sensitivity of long-term interest rates: evidence and implications for macroeconomic models," Proceedings, Federal Reserve Bank of San Francisco, issue Mar.
    5. Peter Isard & Douglas Laxton & Ann-Charlotte Eliasson, 1999. "Simple Monetary Policy Rules Under Model Uncertainty," International Tax and Public Finance, Springer;International Institute of Public Finance, pages 537-577.
    6. Edwin M. Truman, 2003. "Inflation Targeting in the World Economy," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 346.
    7. Refet S. Gürkaynak & Brian Sack & Eric Swanson, 2005. "The Sensitivity of Long-Term Interest Rates to Economic News: Evidence and Implications for Macroeconomic Models," American Economic Review, American Economic Association, vol. 95(1), pages 425-436, March.
    8. International Monetary Fund, 2009. "Inflation Targeting Under Imperfect Policy Credibility," IMF Working Papers 09/94, International Monetary Fund.
    9. Andrew T. Levin & Fabio M. Natalucci & Jeremy M. Piger, 2004. "The macroeconomic effects of inflation targeting," Review, Federal Reserve Bank of St. Louis, issue Jul, pages 51-80.
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    Cited by:

    1. Ali Alichi & Jaromir Benes & Joshua Felman & Irene Feng & Charles Freedman & Douglas Laxton & Evan C Tanner & David Vavra & Hou Wang, 2015. "Frontiers of Monetary Policymaking; Adding the Exchange Rate as a Tool to Combat Deflationary Risks in the Czech Republic," IMF Working Papers 15/74, International Monetary Fund.

    More about this item

    Keywords

    Central banks; Data collection; Data analysis; Inflation targeting; Information technology; Monetary policy; Inflation; Inflation rates; central bank; inflation rate;

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