The paper discusses how current inflation targeting should be modeled, and argues that it is better represented as a …

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

The paper extends previous analysis of closed-economy inflation targeting to a small open economy with forward … for monetary policy. The paper compares targeting of CPI and domestic inflation, strict and flexible inflation targeting …, and inflation-targeting reaction functions and the Taylor rule. The optimal monetary policy response to several different …

This paper assesses inflation targeting in emerging market economies (EMEs), and develops applied prescriptions for the … conduct of monetary policy and inflation-targeting design in EMEs. We verify that EMEs have faced more acute trade-offs higher … stable institutions. At an operational level, we propose a procedure that a central bank under inflation targeting can apply …

extent to which it is similar to inflation targeting as practiced by an increasing number of central banks. I examine the …

examines the adoption, operational design, and experience of inflation targeting as a framework for monetary policy in the … operation of the long-standing German monetary targeting regime, which incorporated many of the same features as later inflation-targeting … operational questions emerges from this comparative study, suggesting some lines of best practice for inflation-targeting …

This paper deals with the relationship between inflation targeting and exchange rates. I address three specific issues …: first, I analyze the effectiveness of nominal exchange rates as shock absorbers in countries with inflation targeting. This … volatility is different in countries with an inflation targeting regime than in countries with alternative monetary policy …

to solve these problems, we propose modifying the central bank's objective to (i) include state-contingent inflation … targets, (ii) target a measure of inflation that overweights non-tradable inflation …

conjunction with some inflation target. Interest rates on short-term indexed government debt (i.e., a real interest rate) have … inflation target; and (iii) a real interest rate rule combined with an inflation target. These policy rules, however, become … increasingly complex: the first rule requires no feedback mechanism; the second rule requires responding to the inflation gap …

Standard discussions of flexible inflation targeting as an optimal monetary policy abstract completely from the … consequences of monetary policy for the government budget. But at least some of the countries now adopting inflation targeting have … are of substantial concern, and some (notably Sims 2005) have argued that inflation targeting can even be …