Working Paper: NBER ID: w7618
Authors: Frederic S. Mishkin
Abstract: This paper outlines what inflation targeting involves for emerging market/transition countries and discusses the advantages and disadvantages of this monetary policy strategy. The discussion suggests that although inflation targeting is not a panacea and may not be appropriate for many emerging market countries, it can be a highly useful monetary policy strategy in a number of them.
Keywords: inflation targeting; emerging markets; monetary policy
JEL Codes: E5
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| inflation targeting (E31) | improved monetary policy effectiveness (E52) |
| inflation targeting (E31) | domestic stability (F55) |
| inflation targeting (E31) | increased central bank accountability (E58) |
| increased transparency (G38) | better public trust (H40) |
| inflation targeting (E31) | reduced likelihood of time-inconsistency problem (D15) |
| institutional commitment to price stability (E64) | inflation control (E64) |
| external shocks (F69) | inflation outcomes (E31) |
| fiscal policies (H30) | inflation outcomes (E31) |