Current Issues in the Design and Conduct of Monetary Policy

Mohsin Khan

No 2003/056, IMF Working Papers from International Monetary Fund

Abstract: Movements in global capital during the late 1990s and the greater emphasis on price stability led many countries to abandon fixed exchange rate regimes and to design institutions and monetary policies to achieve credibility in the goal of lowering inflation. Such recent developments have brought to the forefront the idea that freely mobile capital, independent monetary policy, and fixed exchange rates form an "impossible trinity." It is possible to have two of these policies, but not all three. Inflation-targeting regimes being adopted by many countries provide a way of resolving this dilemma.

Keywords: WP; government; monetary policy; central bank; country; rules versus discretion; inflation targeting; inflation targeting framework; inflation-targeting strategy; inflation targeting approach; inflation targeting country; monetary policy objective; monetary policy target; managed exchange rate regime; Inflation; Exchange rates; Monetary aggregates; Exchange rate arrangements; Africa; Global (search for similar items in EconPapers)
Pages: 18
Date: 2003-03-01
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Citations: View citations in EconPapers (20)

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