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Inflation Targeting in the Context of IMF-Supported Adjustment Programs

In: Inflation Targeting: Desing, Performance, Challenges

Author

Listed:
  • Mario Blejer

    (International Monetary Fund)

  • Alfredo Leone

    (International Monetary Fund)

  • Pau Rabanal

    (International Monetary Fund)

  • Gerd Schwartz

    (International Monetary Fund)

Abstract

This paper analyzes how an inflation targeting regimes relate with the conditioning established in the IMF assistance programs, and, in particular, with its inclusion within the performance criteria associated with that conditioning. The paper analyzes the Brazil's case, the first country in an IMF program to adopt an inflation target, and the lessons that can be derived from this experience. In its last section, we evaluate the idea of using Taylor rules to assess the inflationary performance. Simulations generated by the rule produces are not very similar to the effective policy rates, although differences diminish when expected inflation replaces current inflation within the rule.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Mario Blejer & Alfredo Leone & Pau Rabanal & Gerd Schwartz, 2002. "Inflation Targeting in the Context of IMF-Supported Adjustment Programs," Central Banking, Analysis, and Economic Policies Book Series, in: Norman Loayza & Raimundo Soto & Norman Loayza (Series Editor) & Klaus Schmidt-Hebbel (Series Editor) (ed.),Inflation Targeting: Desing, Performance, Challenges, edition 1, volume 5, chapter 10, pages 439-464, Central Bank of Chile.
    • Handle: RePEc:chb:bcchsb:v05c10pp439-464
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    References listed on IDEAS

    as
    1. Joel Bogdanski & Alexandre Antonio Tombini & Sergio R. Da C. Werlang, 2001. "Implementing Inflation Targeting in Brazil," Money Affairs, CEMLA, vol. 0(1), pages 1-23, January-J.
    2. Sharon Kozicki, 1999. "How useful are Taylor rules for monetary policy?," Economic Review, Federal Reserve Bank of Kansas City, vol. 84(Q II), pages 5-33.
    3. John B. Taylor, 1999. "Monetary Policy Rules," NBER Books, National Bureau of Economic Research, Inc, number tayl99-1.
    4. Ilan Goldfajn & Sérgio Ribeiro da Costa Werlang, 2000. "The Pass-through from Depreciation to Inflation: A Panel Study," Working Papers Series 5, Central Bank of Brazil, Research Department.
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    More about this item

    JEL classification:

    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E17 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Forecasting and Simulation: Models and Applications

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