Central Bank performance in a stable economy: is it desirable to adopt inflation targets in Brazil?

Francisco Rigolon () and Fabio Giambiagi ()

Brazilian Journal of Political Economy, 1999, vol. 19, issue 3, 405-425

Abstract: This article deals with the possible adoption of explicit inflation targets by monetaryauthorities in Brazil, following the example of the experiences of New Zealand, Canada,the United Kingdom, Sweden, Finland, Australia and Spain. Inflation targets wouldwork, first, as a coordination device for those involved in the price and wage setting process,and second, as a transparent aim of the monetary policy, whose performance would beevaluated by the adherence of inflation to the targets. The paper shows the motivationsthat explain the adoption of the regime, discusses its theoretical fundamentals, and analyzesthe problems and trade-offs related to its implementation in practice. Finally, based on thetheory and the international experience, some arguments in favour of the adoption of theregime of inflation targets in Brazil are developed. JEL Classification: E52; E58; E43.

Keywords: Inflation targets; stabilization; central bank; monetary policy (search for similar items in EconPapers)
Date: 1999
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