erc/metu
INTERNATIONAL CONFERENCE IN ECONOMICS  IV
September 13-16, 2000, Ankara

Inflation Targeting in Developing Countries

Ferya Kadıoğlu (CBRT)
Nilüfer Özdemir (CBRT)
Gökhan Yılmaz (CBRT)

Abstract  

Macroeconomic policies have many goals like low inflation, high economic growth, balance of payment equilibrium etc. Since the monetary policy has more flexible framework and exerts its effect with short lags, it has certain advantages over fiscal policy. The issue with the monetary policy is that as it is widely accepted today, the central banks can only control inflation rates in the long-run. In 1990’s, after the failure of monetary and nominal exchange rate targeting to reduce inflation rates, Inflation Targeting (IT) is implemented successfully in some developed countries which encouraged developing and transition countries fighting against the high inflation rates. In this paper, the applicability and prerequisities of IT in developing countries will be disscused and Turkish case will be examined.

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Middle East Technical University
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