A reaction function is estimated for interest rates set by the Bank of Botswana since financial liberalisation. Interest rate changes tend to be larger and somewhat less frequent than in developed countries. Interest rates are nevertheless smoothed in the sense that successive changes tend to be...

This paper investigates the performances of an inflation targeting regime in a learning economy whose functioning is tackled via an Agent-Based Model (ABM). While the structure of our ABM has features in common with those of the New Keynesian canonical modelling framework, we model the...

Previous research on inflation targeting (IT) has focused on high-income countries (HICs) and emerging market economies (EMEs). Only recently has enough data accumulated for the performance of IT in low-income countries (LICs) to be assessed. We show that IT has not so far been as effective in...