Observed inflation targets around the industrial world are concentrated at two percent per year. This chapter … investigates the extent to which the observed magnitudes of inflation targets are consistent with the optimal rate of inflation … inflation ranges from minus the real rate of interest to numbers insignificantly above zero. Furthermore, we argue that the zero …

Should central banks, because of the zero-lower-bound problem, raise their inflation-rate targets? Several arguments … are relevant. (1) In the absence of the ZLB, the optimal steady-state inflation rate, according to standard New Keynesian … currency is feasible (even arguably attractive) and would remove the ZLB constraint on policy. (5) Increasing target inflation …

Yes, as inferred from panel evidence for inflation-targeting countries and a control group of high-achieving industrial … countries that do not target inflation. Our evidence suggests that inflation targeting helps countries achieve lower inflation … in the long run, have smaller inflation response to oil-price and exchange-rate shocks, strengthen monetary policy …

exchange rate pegs: to the dollar, euro and SDR. One candidate is orthodox Inflation Targeting. Three candidates represent … proposals for a new sort of inflation targeting that differs from the usual focus on the CPI, in that prices of export …

against inflation attained by the region during the 1990s. We start by calling for a refocus of the debate about the conduct …, long-run strategies for monetary policy in Latin America: a hard exchange-rate peg, monetary targeting, and inflation …

This paper reviews the recent experience of a half-dozen Latin American inflation-targeting (IT) nations. We document …

draw some implications for timing between monetary expansion and inflation, inter-country comparisons of inflation rates … lead inflation in the sense that money Granger-causes prices without feedback, contradicting an implication of the monetary … of inflation during the fixed exchange rate period, providing no evidence for a generalized "law of one price." (3) Some …

fluctuations in the output gap, relative to the inefficiencies associated with the fluctuations in inflation. With capital account … the inflation rate than on narrowing the output gaps. We provide a re- interpretation of the evidence on the effect of …

paid to the impact of foreign inflation on the real exchange rate and other real variables. At first, an environment in … can be traded. The effect of foreign inflation on domestic real variables depends on: 1) the degree to which it causes a …

inflation (with base drift in the price level) and price-level stability (without such base drift) are compared, and a suitable … loss function (corresponding to flexible inflation targeting) is discussed, including the index and level for the inflation … price stability. The benefits of credibility (private inflation expectations coinciding with the inflation target) are …