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Implementing inflation targeting in Brazil: an institutional analysis

Eduardo Strachman ()

MPRA Paper from University Library of Munich, Germany

Abstract: The paper shows the advantages and handicaps of implementing an inflation target (IT) regime, from a Post-Keynesian and, thus, an institutional stance. It is Post-Keynesian as long as it does not perceive any benefit in the mainstream split between monetary and fiscal policies. And it is institutional insofar as it assumes that there are several ways of implementing a policy, such that the chosen one is determined by historical factors, as it is illustrated by the Brazilian case. One could even support IT policies if their targets were seen just as “focusing devices” guiding economic policy, notwithstanding other targets, as, in the short run, output growth and employment and, in the long run, technology and human development. Nevertheless, an IT is not necessary, although it can be admitted, mainly if the target is hidden from the public, in order to increase the flexibility of the Central Bank.

Keywords: Brazil; Inflation; Inflation Targeting; Monetary Policy; Economic Policy; Central Bank (search for similar items in EconPapers)
JEL-codes: E31 E42 E52 E58 N16 (search for similar items in EconPapers)
Date: 2009, Revised 2009-05
New Economics Papers: this item is included in nep-mac and nep-mon
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