Abstract

WALKER, Todd B.. Inflation Targeting in Emerging Economies. Ens. polit. econ. [online]. 2018, vol.36, n.spe85, pp.7-20. ISSN 0120-4483.  https://doi.org/10.32468/espe.8501.

I document the decline in the rate of inflation in 14 emerging economies after the implementation of an inflation targeting (IT) regime. I briefly describe how each country implements the IT, and argue that the new regime forced policy coordination amongst various governmental units, allowed for a more singular focus, and more transparent policy making process. This allowed agents to better coordinate expectations which precipitated the decline in the rate of inflation. I also document the difficulty with hitting a precise inflation target over a short period of time in the same countries. A model of policy coordination is presented to show how inflation is determined by joint behavior of monetary and fiscal policies.

JEL Classification: C11, C32, E62, H39.

Keywords : Inflation Targeting; Emerging Economies.

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