Inflation Targeting: What is the Meaning of the Bottom of the Band?

Eric Clifton

No 1999/008, IMF Policy Discussion Papers from International Monetary Fund

Abstract: This paper investigates the meaning of the bottom of target bands in inflation targeting regimes. It is argued that the design of lower limits on target bands, if not done with care, can lead to a lack of transparency, potentially confusing markets about how the authorities will react to a fall in inflation. After first discussing the conceptual issues, the paper then examines the experience with target bands in New Zealand, Israel and Canada and explores how the conceptual issues have played out in practice.

Keywords: PDP; government; inflation target; Inflation targeting; credibility; monetary policy; target band; inflation rate; A. General regime design; IT literature; inflation targeting experience; IT framework; inflation targeting framework; inflation target band; Inflation; Disinflation; Price stabilization (search for similar items in EconPapers)
Pages: 24
Date: 1999-12-01
References: Add references at CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
http://www.imf.org/external/pubs/cat/longres.aspx?sk=3375 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:imf:imfpdp:1999/008

Ordering information: This working paper can be ordered from
http://www.imf.org/external/pubs/pubs/ord_info.htm

Access Statistics for this paper

More papers in IMF Policy Discussion Papers from International Monetary Fund International Monetary Fund, Washington, DC USA. Contact information at EDIRC.
Bibliographic data for series maintained by Akshay Modi ().