A Band-Aid Solution to Inflation Targeting

Robert Amano, Richard Black and Marcel Kasumovich

Working Papers from Bank of Canada

Abstract: This paper reviews selectively the literature on exchange rate target zones and corresponding methodologies and examines whether they can be used to analyse the inflation-control problem. Given the close correspondence between the exchange rate and inflation-targeting problems, the target-zone literature may help us better understand inflation dynamics and central-bank credibility in the presence of inflation-control targets or ranges. While we find many common elements across the exchange rate and inflation-control target-zone problems, we also find several important differences that make a direct application of the exchange rate target-zone techniques difficult.

Keywords: Inflation; targets (search for similar items in EconPapers)
JEL-codes: E31 E50 (search for similar items in EconPapers)
Date: 1997
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Persistent link: http://EconPapers.repec.org/RePEc:bca:bocawp:97-11

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