Inflation targeting is a statement about the objective of central bank policy and not about operating procedures. Its success depends not only on the actions of the central bank, but requires a broad consensus concerning the proper role of monetary policy in the economy. It also requires the backing of a sound fiscal policy. As countries differ both in economic structure and monetary transmissi...

This paper analyses the optimal frequency for Central Bank evaluation in an inflation-targeting regime, applied to the Brazilian economy. Setting a frequency of accountability is an important issue in the design of an inflation-targeting regime, since it allows the matching of conflicting targets between the monetary authority and the government: while the government cares about inflation and e...

We apply propensity score matching estimators with multiple outcomes to evaluate the impacts of exchange rate regimes (fixed, intermediate, and flexible without inflation targeting) and inflation targeting on inflation rates in emerging and developing countries. An inflation-targeting regime does better than or at least as good work as a fixed regime in lowering inflation rates when compared wi...

Oil price shocks are the main source of macroeconomic fluctuations in oil exporting countries. It is believed that appropriate monetary policy can help to stabilize these unwanted variations toward optimal allocations. A stochastic dynamic general equilibrium model featuring the properties of both cost push and wealth effect transmission channels is developed for the Iranian economy. In thi...

Monetary authorities have often voiced their concerns about a high debt level that could potentially restrain their ability to control the short-term interest rate as an instrument of monetary policy. However, monetary policy rules in the literature do not account for such constraints. This paper derives an augmented interest rate rule in which the response of the interest rate to expected infl...

A general-equilibrium shopping-time model ofmoney demand is used to obtain estimates ofsome dynamic costs ofinflation under alternative monetary policy rules. After examining the welfare implications ofsteady-state inflation, dynamic welfare costs are evaluated for inflation-targeting and price-level targeting regimes in a stochastic setting in which agents are uncertain about the underlying in...

Experts believe that by lowering the interest rate on bank accounts, total cost of goods and services decreases, and secondly, investment production increases,  both of which lead to lower inflation and provide stable employment field, on the other hand, are concerned about the negative effects of lowering the interest rate without lowering inflation and know the underlying requirement of nomin...

Inflation targeting has become one of the most significant developments of recent decades in both the theory and the practice of monetary policy. A rapidly expanding literature has analysed the a priori properties of various ‘inflation targeting’ strategies, and an increasing number of central banks around the world – the Bank of Canada, the Bank of England, the Swedish Riksbank, and numerous o...