We question the empirical foundation of keeping inflation at 5% or below in developing economies. Using System Generalized Method of Moments we investigate the issue in the context of 14 Asian developing countries for the period 1961-2010. We find no robust empirical justification for targeting...

Most small island economies or "microstates" have distinctly different characteristics from larger developing economies. They are more open and vulnerable to external and environmental shocks, resulting in high output volatility. Most of them also suffer from locational disadvantages. Although a...