Economic Issues

Inflation Targeting as a Framework for Monetary Policy

Author/Editor:

Guy Debelle ; Miguel A Savastano ; Paul R Masson ; Sunil Sharma

Publication Date:

October 2, 1998

Electronic Access:

Free Download. Use the free Adobe Acrobat Reader to view this PDF file

Summary:

Inflation distorts prices, erodes savings, discourages investment, stimulates capital flight, inhibits growth, and makes economic planning a nightmare. During the past decade, several advanced economies have taken a new approach to the age-old problem of controlling inflation through monetary policy known as "inflation targeting." This pamphlet explains the requirements of putting the new policy in place, the experience of the countries that have tried it, and whether it has applicability to developing countries.

Series:

Economic Issues No. 1998/005

Subject:

Banking Exchange rates Foreign exchange Inflation Inflation targeting Monetary policy Monetary policy frameworks Monetary policy instruments Prices