This paper is concerned with the design of institutional arrangements for low inflation in small open economies. In the …

sub-Saharan African countries on the relative importance of fiscal and monetary determinants of inflation. Based on the … dynamic response of inflation to different shocks, including nominal public debt, results show that a number of SSA countries … of inflation variability, as predicted by the fiscal theory of the price level …

Adoption of inflation targeting by the Bank of Korea (BOK) in 1998 contributed to low and stable inflation. However …, after the global financial crisis (GFC) monetary policy faced more challenging conditions. Inflation slipped below the … monetary policy can focus on the inflation target. Simulation of a macro model calibrated to Korea illustrates how it can be …

, particularly when there is a risk of low inflation, and the policy rate is constrained by the effective lower bound. Model … equilibrium real interest rate, this strategy is preferable to raising the inflation target …

supply shocks. Moreover, the paper shows that the implementation of an optimal inflation target results in optimal shares of … stabilization. Even if price stability is the sole central bank objective, a positive inflation target has important implications …