This paper presents a small open economy model to analyze the role of central bank liquidity management in implementing "unconventional" monetary policies within an inflation targeting framework. In particular, the paper explicitly models the facilities that the central bank uses to manage...

This paper reviews the recent experience of a half-dozen Latin American inflation targeting (IT) nations. Repeated and large deviations from the standard IT framework are documented: exchange market interventions have been lasting and widespread; the real exchange rate has often become a target of...

This paper assesses the challenges that the lack of credibility poses for the implementation of inflation targeting, and for the design of inflation stabilization processes in emerging market economies. We also discuss the role that credibility has played in rationalizing the main elements of...