Statistical Implications of Inflation Targeting


Carol Carson, Claudia Dziobek, and Charles Enoch
Published Date:
September 2002
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Introduction to Part V

In the closing chapter, Carol S. Carson, Charles Enoch, and Claudia Dziobek (Chapter 19) present four broad conclusions from the seminar papers and discussions. (1) Inflation targeting leads to expanded information requirements, and policymakers adopt more systematic ways of handling information, including more explicit communication strategies, to meet the inflation targets and to foster credibility. (2) Information needs expand, especially for forward-looking indicators such as expectations surveys, data on expected inflation extracted from bond markets, and data on target variables and their constituent elements. (3) Establishing effective institutional arrangements to produce and use data—including having independent central banks and national statistical offices, adequate resources for statistical agencies, and a better understanding of each other’s information needs—is an important element of inflation-targeting policy regimes. (4) Further steps for the IMF may be refinements to the International Financial Statistics in the area of forward-looking indicators, research on appropriate forward-looking indicators in countries with limited capital market development, and modifications in the data sought from member countries for macroeconomic surveillance.

The statistical issues that arise for countries with explicit inflation-targeting regimes are largely the same as those of other major central banks that view price stability as a high priority (for example, the European Central Bank or Federal Reserve Board). In this regard, it appears that the conclusions of this seminar are relevant for many IMF member countries.

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