The Journey to Inflation Targeting: Easier Said than Done The Case for Transitional Arrangements along the Road

Bernard Laurens, Kelly Eckhold, Darryl King, Nils Maehle, Abdul Naseer and Alain Durré ()

No 2015/136, IMF Working Papers from International Monetary Fund

Abstract: Countries with evolving monetary regimes that decide to embark on “the Journey to inflation targeting” may not be able to adopt a full-fledged inflation targeting regime immediately. Those countries would be better off adopting transitional arrangements that take advantage of the informational content of monetary aggregates, developing an economic analysis capacity, and concentrating on monetay operations aimed at steering money market interest rates. This approach would allow the central bank to buy time for developing the building blocks for effective monetary policy, support transparent central bank communication, and limit the potential for undesirable outcomes along the road.

Keywords: WP; regime; country; central bank; monetary policy; monetary regime; monetary policy transmission; MT regime; central bank communication; monetary policy implementation; balance sheet management; central bank Independence; transitional regime; a number of country; monetary policy framework; regime in place; country's authorities; Monetary base; Monetary aggregates; Inflation; Inflation targeting; Monetary policy frameworks; Africa; Global (search for similar items in EconPapers)
Pages: 44
Date: 2015-06-25
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Citations: View citations in EconPapers (14)

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