Journal Screenshot

International Journal of Academic Research in Economics and Management Sciences

Open Access Journal

ISSN: 2226-3624

Price stability in Open-Economy under Inflation Targeting Regime with Factors Influencing Inflation Volatility: The Case of Brazil

Abdelkader Aguir

http://dx.doi.org/10.6007/IJAREMS/v3-i6/1358

Open access

This paper analyzes the relevance of the inflation targeting (IT) policy in achieving its primary goal of medium term price stability in a open economy allowing the investigation of Brazil’s experience with inflation targeting. It finds that this monetary policy regime has been associated with a general reduction in inflation, principally through a reduction in inflation expectations. The question addressed in this papr is to identify factors that may influence volatility of inflation and why Brasil are more successful than others adopting the policy of inflation targeting.

Aguir, A. (2014) « Inflation Targeting: An Alternative to Monetary Policy » International Journal of Economics and Finance Vol 6, No 7
Aguir, A. (2014), “ The effects of inflation targeting strategy on the growing performance of emerging countries“International Journal of Economics, Commerce and Management Vol. II, Issue 8.
Aguir,A.(2014) “Price stability in Open-economy under inflation targeting regime with factors influencing inflation volatility” International Finance and Banking Vol. 1, No. 2, December.
Ball, L. (1998) “Policy Rules for Open Economies,” Research Discussion Paper 9806
(Sydney: Reserve Bank of Australia).
Celasun, O., Gaston, G., and Alessandro, P., (2004) “Obstacles to Disinflation: What Is the Role of Fiscal Expectations?” IMF Working Paper 04/111 (Washington: International Monetary Fund).
Dennis, R., (2001) “Monetary Policy and Exchange Rates in Small Open Economies,” Federal Reserve Bank of San Francisco Economic Letter 2003-16, May, (San Francisco: Federal Reserve Bank of San Francisco).
Galí, J., and Tommaso, M., (2004) “Monetary Policy and Exchange Rate Volatility in a Small Open Economy” (unpublished; Barcelona: Universitat Pompeu Fabra).
Hördahl, P., Oreste, T., and David, V. (2003) “A Joint Econometric Model of Macroeconomic and Term Structure Dynamics” (unpublished; Frankfurt: European Central Bank).

Mishkin, F. S., (2004) “Can Inflation Targeting Work in Emerging Market Countries?” paper presented at an IMF conference in honor of Guillermo A. Calvo, Washington, D.C., April.
Parrado, E., (2004) “Inflation Targeting and Exchange Rate Rules in an Open Economy,” IMF Working Paper 04/21 (Washington: International Monetary Fund).
Porter, N., (2004) “Wage Compression, Employment Restrictions and Unemployment: The Case of Mauritius,” IMF Working Paper 04/205 (Washington: International Monetary Fund).
Porter, N., & J. Y. Yao. (2005). ‘Inflation Targeting Lite in Small Open Economies:
The Case of Mauritius. IMF Working Paper, WP/05/172.
Rudebusch, G., and Tao, W., (2003) “A Macro-Finance Model of the Term Structure, Monetary Policy, and the Economy,” Federal Reserve Bank of San Francisco Working Paper 2003-17, September, (San Francisco: Federal Reserve Bank of San Francisco).
Sacerdoti, E., Gamal, E., Padamja, K., and Yudong, Y., (2005) Mauritius: Challenges of Sustained Growth (Washington: International Monetary Fund).
Sims, C. A., (2001) “Solving Linear Rational Expectations Models,” Computational Economics, Vol. 20, pp. 1–20.
Stone, M. (2003) “Inflation Targeting Lite,” IMF Working Paper 03/12 (Washington: International Monetary Fund).
Svensson, L.E.O. (2000) “Open Economy Inflation Targeting,” Journal of International Economics, Vol. 50, pp. 155–183.
Truman E., (2003) Inflation Targeting and the International Financial System: Challenges and Opportunities (Washington: Institute for International Economics.)

(Aguir, 2014)
Aguir, A. (2014). Price stability in Open-Economy under Inflation Targeting Regime with Factors Influencing Inflation Volatility: The Case of Brazil. International Journal of Academic Research in Economics and Management Sciences, 3(6), 143–152.