The Role of Inflation and its Targeting for Low-Income Countries (Lessons from Post-Communist Georgia)

European Journal of Economic Studies, Vol. 6, Issue 2, 2017

Posted: 6 Sep 2017

See all articles by Vakhtang Charaia

Vakhtang Charaia

Ivane Javakhishvili Tbilisi State University (TSU)

Vladimer Papava

Ivane Javakhishvili Tbilisi State University

Date Written: August 30, 2017

Abstract

The inflation index regrettably fails to fully reflect the expectation of the population in developing and, especially, poorer countries. Some of the commodity groups (e.g. electronics, new and used cars, furniture, hotel and restaurant services, etc.) fails to reflect the problem of the low-income population. Under these conditions, a logical question arises concerning the kinds of problems which might occur when the main goal for a central bank’s monetary policy is only to retain price stability, which is known as inflation targeting.

Keywords: Inflation, Inflation Targeting, Low-Income Population, Imflation, Agflation, Munflation

JEL Classification: E31, E42, E52

Suggested Citation

Charaia, Vakhtang and Papava, Vladimer, The Role of Inflation and its Targeting for Low-Income Countries (Lessons from Post-Communist Georgia) (August 30, 2017). European Journal of Economic Studies, Vol. 6, Issue 2, 2017. Available at SSRN: https://ssrn.com/abstract=3029628

Vakhtang Charaia

Ivane Javakhishvili Tbilisi State University (TSU) ( email )

1, Ilia Tchavtchavadze avenue
Building I
Tbilisi, 0179
Georgia
+995-593-13-18-11 (Phone)
+995-32-222-5107 (Fax)

Vladimer Papava (Contact Author)

Ivane Javakhishvili Tbilisi State University ( email )

1, Ilia Tchavtchavadze avenue
Tbilisi, Tbilisi 0179
Georgia
+995 32 222-0241 (Phone)
+995 32 222-5107 (Fax)

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