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Credibility and Inflation Targeting in an Emerging Market: Lessons from the Chilean Experience *
Author(s) -
Céspedes Luis F.,
Soto Claudio
Publication year - 2005
Publication title -
international finance
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.458
H-Index - 39
eISSN - 1468-2362
pISSN - 1367-0271
DOI - 10.1111/j.1468-2362.2005.00169.x
Subject(s) - credibility , economics , inflation (cosmology) , emerging markets , inflation targeting , monetary policy , monetary economics , macroeconomics , process (computing) , political science , physics , theoretical physics , computer science , law , operating system
This paper assesses the challenges that the lack of credibility poses for the implementation of inflation targeting, and for the design of inflation stabilization processes in emerging market economies. We also discuss the role that credibility has played in rationalizing the main elements of the disinflationary process in Chile during the 1990s and in explaining the grounds behind the monetary policy framework's changes in Chile at the end of the last decade.