Inflation Targeting in Emerging Market and Transition Economies: Lessons after a Decade
HKIMR Working Paper No. 13/2001
11 Pages Posted: 4 Sep 2007
Date Written: October 2001
Starting in the early 1990s, several emerging market and transition economies (EMEs) have adopted inflation targeting (IT). In this paper we discuss a number of issues that arise in this context: (a) the definition of IT, (b) the role of preconditions for IT, (c) the use of intermediate exchange rate targets, and (d) the specification of inflation targets. Our overall conclusion is that, suitably modified, IT is a useful policy strategy for EMEs.
Keywords: Inflation targeting, central banks, monetary policy
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