Beyond Inflation Targeting: Assessing the Impacts and Policy Alternatives

This volume, edited by Gerald Epstein and Erinc Yeldan, develops concrete, country-specific alternatives to inflation targeting, the dominant policy framework of central bank policy that focuses on keeping inflation in the low single digits to the virtual exclusion of other key goals. Chapters focus on alternative policy goals, such as employment creation, poverty reduction and sustainable development, and also includes thematic chapters on class attitudes toward inflation and unemployment and the gender impacts of restrictive monetary policy. The authors also show that to reach policy goals beyond inflation control, central banks must use a broader range of financial policy instrument.

Inflation targeting (IT) has become the sacred cow of central banking. But its suitability to developing nations remains contested. The contributors to this volume perform the valuable service of sketching out plausible, more development-friendly alternatives. They are to be commended in particular for avoiding a one-size-fits-all approach and paying close attention to the needs of specific countries. Their proposals range from relatively minor tinkering in IT to comprehensive overhaul. A common theme is the central role of the real exchange rate, which the central banks ignore at their economies

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