Inflation targeting in the world economy / Edwin M. Truman.

Format:

Book

Author/Creator:

Truman, Edwin M.

Language:

English

Subjects (All):

Anti-inflationary policies.

Monetary policy.

International finance.

Physical Description:

xvi, 261 pages : illustrations ; 23 cm

Place of Publication:

Washington, DC : Institute for International Economics, 2003.

Summary:

The author addresses the challenges and risks associated with inflation targeting as a monetary policy framework. The study focuses on two major international economic policy issues: (1) the implications of differing national regimes of inflation targeting for international economic policy cooperation, and (2) the adoption of inflation targeting by emerging-market economies that often lack stable monetary policy environments and credible policy authorities--a situation that, among other things, can complicate the use of the inflation targeting framework as the basis for IMF-supported stabilization programs.

Contents:

1 What Is the Fuss All About? 1

What Is Inflation Targeting? 5

What Are the Issues? 8

Plan of the Book 11

Appendix 1.1 Monetary Policy Regimes 13

2 Attraction of Inflation Targeting 17

Intellectual Origins 17

Choosing an Inflation-Targeting Framework 38

3 Inflating Targeting in Practice 47

Necessary Preconditions 48

What the Skeptics Say 55

The Framework in Practice: Four Principal Elements 60

Actual and Potential Inflation Targeters 67

Empirical Investigations 71

4 Inflation Targeting and the Group of Three 99

Individual Adoption 100

Joint Adoption 159

5 Exchange Rate Regimes, Policies, and Practices 165

Performance of Exchange Rates under Inflation Targeting 167

Inflation Targeting and Exchange Rate Regimes 177

Inflation Targeting and Exchange Market Operations 181

The "Fear of Flating" 185

6 International Financial Architecture 191

Prevention and Management of Crises 191

IMF Adjustment Programs 196

7 Challenges and Opportunities 205

Inflation Targeting by the G3 209

Is Inflation Targeting Broadly Applicable? 211

Implications for Exchange Rate Policies 213

Implications for the International Financial Architecture 214

Recommendations 215

Table 2.1 Average rates of CPI inflation and growth rates of real GDP, 1990-2002 21

Table 2.2 Inflation variability and inflation in industrial countries over three decades 24

Table 2.3 Countries with inflation-targeting monetary policy frameworks 29

Table 2.4 Factors associated with a country's choice of inflation targeting 40

Table 3.1 Overview of inflation-targeting frameworks 61

Table 3.2 Evaluation in inflation-targeting frameworks 67

Table 3.3 Categorization of inflation targeters, based on inflation rates 69.

Notes:

Includes bibliographical references (pages 237-254) and index.

ISBN:

0881323454

OCLC:

52902630