This paper uses simple analytics to show the similarities and differences between inflation targeting and fear of floating in emerging markets. The analytics provide well-defined predictions for the behaviour of exchange rates and relevant monetary variables under both regimes. This allows us to...

This paper modifies Calvo and Reinhart's (2002) fear of floating analysis to distinguish between de facto inflation targeting (IT) and fear of floating (FF) behavior in a sample of 10 de jure inflation targeting countries. We present three main findings. 1) The standard approach misclassifies...