It Framework Design Parameters

Douglas Laxton and Charles Freedman

No 2009/087, IMF Working Papers from International Monetary Fund

Abstract: This is the third chapter of a forthcoming monograph entitled "On Implementing Full-Fledged Inflation-Targeting Regimes: Saying What You Do and Doing What You Say." It examines a number of elements in the design of an inflation-targeting framework. These include the definition of the target variable, the relevance of core measures of inflation, and the advantages and disadvantages of point targets, point targets with a band, and range targets. It then discusses the choice of a long-term inflation rate, the target horizon, and the policy horizon.

Keywords: WP; central bank; CPI; supply shock; inflation rate; Inflation Targeting; Monetary Policy; core CPI; inflation result; reaction function; headline CPI; rate of inflation; inflation expectation; Inflation; Consumer price indexes; Supply shocks; Output gap; Africa (search for similar items in EconPapers)
Pages: 16
Date: 2009-04-01
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Citations: View citations in EconPapers (1)

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