discusses two emerging market countries which illustrate what it takes to make inflation targeting work well, Chile and Brazil …This paper explores issues in emerging market countries to make inflation targeting work for them. It starts by …, financial and monetary institutions is so critical to the success of inflation targeting in emerging market countries. Then it …

Studying the recent experience of Brazil the paper explains how default risk is at the centre of the mechanism through … which an emerging market central bank that targets inflation might lose control of inflation--in other words of the … perverse effect on inflation. We show that the presence of default risk reinforces the possibility that a vicious circle might …

higher the proportion of foreign-currency-denominated debt, and the higher the price of risk. Under that outcome, inflation … targeting can clearly have perverse effects: An increase in the real interest in response to higher inflation leads to a real … depreciation. The real depreciation leads in turn to a further increase in inflation. In this case, fiscal policy, not monetary …

inflation (with base drift in the price level) and price-level stability (without such base drift) are compared, and a suitable … loss function (corresponding to flexible inflation targeting) is discussed, including the index and level for the inflation … price stability. The benefits of credibility (private inflation expectations coinciding with the inflation target) are …

Previous analysis of the implementation of inflation targeting is extended to monetary policy responses to different … stabilization or smoothing all call for a more gradual adjustment of the conditional inflation forecast toward the inflation target …. The conditional inflation forecast is the natural intermediate target during inflation targeting …

Inflation targeting is shown to imply inflation forecast targeting: the central bank's inflation forecast becomes an … explicit intermediate target. Inflation forecast targeting simplifies both implementation and monitoring of monetary policy …. The weight on output stabilization determines how quickly the inflation forecast is adjusted towards the inflation target …

This paper considers the problem of optimal long run monetary policy. It shows that optimal inflation policy involves … trading off two quite different considerations. First, increases in the rate of inflation tax the holding of many balances … of inflation raise capital intensity. As long as the economy has a capital stock short of the golden rule level …

, we document several potential fiscal dominance effects during 2000-2017 under Inflation Targeting (IT), and non …

The rise, fall, and stabilization of US inflation between 1969 and 2005 is consistent with a model of shifting policy … sector learning about policymaker type. Using model-implied inflation forecasting rules to extract state variables from the … inflation forecasts in the Survey of Professional Forecasters, we provide evidence that policy regimes without commitment …

countries with low inflation, the raw relationship between average inflation and the growth rate of money is tenuous at best … elasticities implied by theories of Baumol-Tobin and Miller-Orr. Finally, the sample after 1990 shows considerably less inflation … variability, worsening the fit of a one-for-one relationship between money growth and inflation, and generates a fairly low …