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Is inflation targeting still on target?

Céspedes, Luis Felipe, Chang, Roberto and Velasco Branes, Andres (2012) Is inflation targeting still on target? NBER Working Paper (18570). National Bureau of Economic Research, Cambridge, MA.

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Identification Number: 10.3386/w18570

Abstract

This paper reviews the recent experience of a half-dozen Latin American inflation-targeting (IT) nations. We document repeated and large deviations from the standard IT framework: exchange market interventions have been lasting and widespread; the real exchange rate has often become a target of policy, though this target is seldom made explicit; a range of other non-conventional policy tools, especially changes in reserve requirements but occasionally also taxes or restrictions on international capital movements, also came into common use. As in developed nations, during the 2008-2009 crisis issues of liquidity provision took center stage. We also attempt a first evaluation of the emerging modified framework of monetary policy. In general terms, the new approach seems to have been effective, at the very least since the region weathered the crisis reasonably well. But also, and perhaps more importantly, many questions remain about the desirability of non-conventional monetary policies in Latin America.

Item Type: Monograph (Working Paper)
Additional Information: © 2012 The Authors
Divisions: School of Public Policy
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Subjects: H Social Sciences > HG Finance
JEL classification: E - Macroeconomics and Monetary Economics > E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit > E52 - Monetary Policy (Targets, Instruments, and Effects)
E - Macroeconomics and Monetary Economics > E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit > E58 - Central Banks and Their Policies
Date Deposited: 10 Oct 2019 16:09
Last Modified: 10 Oct 2019 23:27
URI: http://eprints.lse.ac.uk/id/eprint/102047

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