Brazil has experienced crucial changes in its inflation process since the adoption of inflation targeting in mid 1999 …. This article addresses changes in the analytical framework employed to track the inflation dynamics, specifically the … relevance of an explicit target for inflation. A New-Keynesian Phillips curve (NKPC) is derived incorporating indexation not …

This paper examines the interaction of core inflation and inflation targeting as a monetary policy regime. Interest in … core inflation has grown because of inflation targeting. Core inflation is defined in numerous ways giving rise to many … potential measures; this paper defines core inflation as the best forecaster of inflation. A cross-country study finds before …

What is the correctly measured inflation rate that monetary policy should aim for in the long-run? This paper … characterizes the optimal inflation rate for the U.S. economy in a New Keynesian sticky-price model with an occasionally binding … zero lower bound on the nominal interest rate. Real-rate and mark-up shocks jointly determine the optimal inflation rate to …

The purpose of this short paper is to show that inflation “band” targeting can solve the “time inconsistency” problem … that exists under inflation “point” targeting by setting a relevant target range. Moreover, we show that inflation band … natural levels, by setting the inflation rate within a target range and creating unexpected inflation. 2) It can mitigate …

experiment of the past decade, stemming from a belief of the government that higher interest rates cause higher inflation … eventually a negative coefficient on inflation in the policy rule. In such an environment, was the exchange rate still a random … walk? Was inflation anchored? Does the “standard model” suffice to explain the broad contours of macroeconomic outcomes in …

This paper reconsiders the link between tight money policies and inflation in the spirit of Sargent and Wallace's (1981 … return-dominated currency is used to study the long-run effects on inflation of a tightening of monetary policy engineered … arithmetic can be stable. In contrast, when monetary policy is conducted via an inflation target rule, the only stable …

In this paper we analyze whether inflation targeting is feasible in Poland. There are at least three prerequisites for … successful inflation targeting: 1) central bank independence, 2) a high degree of central bank accountability, transparency, and … communication to the public, and 3) a predictable and stable relationship between inflation and the instruments of monetary policy …

Following the Asian financial crisis in 1997-98, a number of Asian central banks adopted inflation targeting. While it … is possible for the average inflation rate to be close to target, deviations of inflation could nevertheless be large and … protracted. We therefore explore how successful this framework has been by looking at the persistence of inflation, as measured …

This paper extends a standard New Keynesian model to describe the effects of anticipated shocks to inflation and …

Over the last quarter of a century, inflation targeting has become a popular monetary regime. Nevertheless, empirical … decision and thus needs to be properly instrumented. In this paper, we show that preferences over inflation constitute a … crucial determinant of IT: countries exhibiting greater inflation aversion are more likely to adopt IT …