Beyond Inflation Targeting: Assessing the Impacts and Policy Alternatives

Beyond Inflation Targeting
Assessing the Impacts and Policy Alternatives

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' peril.'
- Dani Rodrik, Harvard University, US

`As the world economy is devastated by a virulent financial crisis and jobs are lost in scores, central bankers are increasingly questioned as to why they have failed to sustain stability and growth even though they told us all along that conquering inflation would be necessary and sufficient to do so - while hoping to get a pat on the back for achieving a degree of price stability unprecedented in recent times. This book pres a lot of food for thought on why. It is a powerful critique of the orthodox obsession with inflation in neglect of the two deepseated problems of the unbridled market economy - financial instability and unemployment. It is a must for all policy makers, notably in the developing world, and for the mainstream.'
- Yilmaz Akyuz, formerly of the United Nations Conference on Trade and Development, Geneva, Switzerland.
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