Monetary Policy for Emerging Market Economies: Beyond Inflation Targeting
Monetary policymakers normally seek to achieve multiple objectives: for prices as well as real economic activity, sometimes for the composition of real activity as well as the aggregate, and often for aspects of the economy's international balance. The fact that monetary policy has only one basic instrument to use therefore creates both complexity and tensions among these objectives. Although inflation targeting represents a way of imposing a logical consistency on monetary policy, in the presence of multiple policy objectives inflation targeting undermines policy transparency and therefore makes accountability more difficult too. Because of the limitation of monetary policy's having only one instrument, but multiple objectives, fiscal policy and prudential supervision and regulation of financial institutions are also important for enabling emerging market economies to achieve their macroeconomic aims.
Year of publication: |
2008
|
---|---|
Authors: | Friedman, Benjamin Morton |
Institutions: | Department of Economics, Harvard University |
Saved in:
freely available
Saved in favorites
Similar items by person
-
Optimal Economic Stabilization Policy: An Extended Framework
Friedman, Benjamin Morton, (1972)
-
Financial Flow Variables and the Short-Run Determination of Long-Term Interest Rates
Friedman, Benjamin Morton, (1977)
-
Learning From The Crisis: What Can Central Banks Do?
Friedman, Benjamin Morton, (2010)
- More ...