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Frederic S Mishkin - One of the best experts on this subject based on the ideXlab platform.

  • can Inflation Targeting work in emerging market countries
    National Bureau of Economic Research, 2004
    Co-Authors: Frederic S Mishkin
    Abstract:

    This paper explores issues in emerging market countries to make Inflation Targeting work for them. It starts by outlining why emerging market economies are so different from advanced economies and then discuss why developing strong fiscal, financial and monetary institutions is so critical to the success of Inflation Targeting in emerging market countries. Then it discusses two emerging market countries which illustrate what it takes to make Inflation Targeting work well, Chile and Brazil. It then addresses a particularly complicated issue for central banks in emerging market countries who engage in Inflation Targeting: how they deal with exchange rate fluctuations. The next topic focuses on the IMF's role in promoting the success of Inflation Targeting in emerging market countries. The conclusion from this analysis is that Inflation Targeting is more complicated in emerging market countries and is thus not a panacea. However, Inflation Targeting done right can be a powerful tool to help promote macroeconomic stability in these countries.

  • Inflation Targeting in emerging market countries
    National Bureau of Economic Research, 2000
    Co-Authors: Frederic S Mishkin
    Abstract:

    This paper outlines what Inflation Targeting involves for emerging market/transition countries and discusses the advantages and disadvantages of this monetary policy strategy. The discussion suggests that although Inflation Targeting is not a panacea and may not be appropriate for many emerging market countries, it can be a highly useful monetary policy strategy in a number of them.

  • Inflation Targeting in emerging market countries
    The American Economic Review, 2000
    Co-Authors: Frederic S Mishkin
    Abstract:

    This paper outlines what Inflation Targeting involves for emerging market/transition countries and discusses the advantages and disadvantages of this monetary policy strategy. The discussion suggests that although Inflation Targeting is not a panacea and may not be appropriate for many emerging market countries, it can be a highly useful monetary policy strategy in a number of them.(This abstract was borrowed from another version of this item.)

  • Inflation Targeting lessons from the international experience
    1998
    Co-Authors: Ben S Bernanke, Thomas Laubach, Frederic S Mishkin, Adam S Posen
    Abstract:

    How should governments and central banks use monetary policy to create a healthy economy? Traditionally, policymakers have used such strategies as controlling the growth of the money supply or pegging the exchange rate to a stable currency. In recent years a promising new approach has emerged: publicly announcing and pursuing specific targets for the rate of Inflation. This book is a study of Inflation Targeting. Combining theoretical analysis with empirical studies of countries where Inflation Targeting has been adopted, the authors show that the strategy has clear advantages over traditional policies. They argue that the US Federal Reserve and the European Central Bank should adopt this strategy, and they make specific proposals for doing so. The authors warn, however, that the success of Inflation Targeting depends on operational details, such as how the targets are defined and when they are announced. They also show that Inflation Targeting is not a panacea that can make Inflation perfectly predictable or reduce it without economic costs.

  • Inflation Targeting a new framework for monetary policy
    Journal of Economic Perspectives, 1997
    Co-Authors: Ben S Bernanke, Frederic S Mishkin
    Abstract:

    In recent years a number of industrialized countries have adopted a strategy for monetary policy known as `Inflation Targeting.' We describe how this approach has been implemented in practice and argue that it is best understood as a broad framework for policy, which allows the central bank `constrained discretion,' rather than as an ironclad policy rule in the Friedman sense. We discuss the potential of the Inflation-Targeting approach for making monetary policy more coherent and transparent, and for increasing monetary policy discipline. Our final section addresses some additional practical issues raised by this approach.

Yuriy Gorodnichenko - One of the best experts on this subject based on the ideXlab platform.

  • average Inflation Targeting and household expectations
    National Bureau of Economic Research, 2020
    Co-Authors: Olivier Coibion, Yuriy Gorodnichenko, Edward S Knotek, Raphael Schoenle
    Abstract:

    Using a daily survey of U.S. households, we study how the Federal Reserve’s announcement of its new strategy of average Inflation Targeting affected households’ expectations. Starting with the day of the announcement, there is a very small uptick in the minority of households reporting that they had heard news about monetary policy relative to prior to the announcement, but this effect fades within a few days. Those hearing news about the announcement do not seem to have understood the announcement: they are no more likely to correctly identify the Fed’s new strategy than others, nor are their expectations different. When we provide randomly selected households with pertinent information about average Inflation Targeting, their expectations still do not change in a different way than when households are provided with information about traditional Inflation Targeting.

  • Inflation Targeting does not anchor Inflation expectations evidence from firms in new zealand
    National Bureau of Economic Research, 2015
    Co-Authors: Saten Kumar, Olivier Coibion, Hassan Afrouzi, Yuriy Gorodnichenko
    Abstract:

    Using a new survey of firm managers, we investigate whether Inflation expectations in New Zealand are anchored or not. In spite of 25 years of Inflation Targeting by the Reserve Bank of New Zealand, firm managers display little anchoring of such expectations. We document this finding along a number of dimensions. Managers are unaware of the identities of central bankers or of central banks’ objectives, and they are generally poorly informed about recent Inflation dynamics. Their forecasts of future Inflation reflect high levels of uncertainty and are extremely dispersed, and they are volatile along both short-run and long-run horizons. Similar results can be found for the United States using currently available surveys.

  • Inflation Targeting does not anchor Inflation expectations evidence from firms in new zealand
    Research Papers in Economics, 2015
    Co-Authors: Saten Kumar, Olivier Coibion, Hassan Afrouzi, Yuriy Gorodnichenko
    Abstract:

    We study the (lack of) anchoring of Inflation expectations in New Zealand using a new survey of firms. Managers of these firms display little anchoring of Inflation expectations, despite twenty-five years of Inflation Targeting by the Reserve Bank of New Zealand, a fact which we document along a number of dimensions. Managers are unaware of the identities of central bankers as well as central banks’ objectives, and are generally poorly informed about recent Inflation dynamics. Their forecasts of future Inflation reflect high levels of uncertainty and are extremely dispersed as well as volatile at both short and long-run horizons. Similar results can be found in the U.S. using currently available surveys as shown in Binder (2015).

  • Inflation Targeting does not anchor Inflation expectations evidence from firms in new zealand
    Social Science Research Network, 2015
    Co-Authors: Saten Kumar, Olivier Coibion, Yuriy Gorodnichenko, Hassan Afrouzi
    Abstract:

    We study the (lack of) anchoring of Inflation expectations in New Zealand using a new survey of firms. Managers of these firms display little anchoring of Inflation expectations, despite twenty-five years of Inflation Targeting by the Reserve Bank of New Zealand, a fact which we document along a number of dimensions. Managers are unaware of the identities of central bankers as well as central banks’ objectives, and are generally poorly informed about recent Inflation dynamics. Their forecasts of future Inflation reflect high levels of uncertainty and are extremely dispersed as well as volatile at both short and long-run horizons. Similar results can be found in the U.S. using currently available surveys as shown in Binder (2015).Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.

Marcelo Kfoury Muinhos - One of the best experts on this subject based on the ideXlab platform.

  • Inflation Targeting in brazil constructing credibility under exchange rate volatility
    Journal of International Money and Finance, 2003
    Co-Authors: Andre Minella, Ilan Goldfajn, Paulo Springer De Freitas, Marcelo Kfoury Muinhos
    Abstract:

    This paper assesses the challenges faced by the Inflation-Targeting regime in Brazil. The confidence crisis in the future performance of the Brazilian economy and the increase in risk aversion in international markets were responsible for a sudden stop of capital inflows in 2002 that caused a significant depreciation of the exchange rate. The Inflation-Targeting framework has played a critical role in macroeconomic stabilization. We stress two important challenges: construction of credibility and exchange rate volatility. The estimations indicate the following results: i) the Inflation targets have worked as an important coordinator of expectations; ii) the Central Bank has reacted strongly to Inflation expectations; iii) there has been a reduction in the degree of Inflation persistence; and iv) the exchange rate pass-through for "administered or monitored" prices is two times higher than for "market" prices.

Fethi Aƒâ âÿaƒâ A Naƒâ - One of the best experts on this subject based on the ideXlab platform.

  • Inflation Targeting and exchange rate pass through the turkish experience
    Emerging Markets Finance and Trade, 2008
    Co-Authors: Hakan Kara, Fethi Aƒâ âÿaƒâ A Naƒâ
    Abstract:

    Using a vector autoregression model, we show that the pass-through from imported Inflation to domestic Inflation has weakened substantially and slowed after the adoption of Inflation Targeting in Turkey. We argue that this finding is due mainly to several featuresA¢Â€Â”such as enhanced credibility of the central bank, changing behavior of the exchange rate, and a shift in expectation formationA¢Â€Â”possibly acquired by the implementation of a successful Inflation-Targeting regime. These observations suggest that adopting an Inflation-Targeting regime in itself may help to reduce exchange rate pass-through.

Alessandro Flamini - One of the best experts on this subject based on the ideXlab platform.

  • Inflation Targeting and exchange rate pass through
    Journal of International Money and Finance, 2007
    Co-Authors: Alessandro Flamini
    Abstract:

    This paper analyzes how endogenous imperfect exchange rate pass-through affects Inflation Targeting optimal monetary policies in a New Keynesian small open economy. The paper shows that an inverse relation exists between the pass-through and the insulation of the economy from foreign and monetary policy shocks, and that imperfect pass-through tends to decrease the variability of the terms of trade. Furthermore, with CPI Inflation Targeting, in the short run, delayed pass-through constrains monetary policy more than incomplete pass-through and interest rate smoothing amplifies this effect. When the pass-through decreases, the variability in economic activity tends to raise and the trade-of between the stabilization of CPI Inflation and output worsens in direct relation to how strictly the central bank is Targeting CPI Inflation. In contrast, with domestic Inflation Targeting, optimal monetary policy is not constrained and opposite results occur. Consequently, imperfect pass-through favors the choice of domestic to CPI Inflation Targeting.