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This paper was prepared for the conference “Challenges to Central Banking from Globalized Financial Systems” held at the IMF in Washington, D.C., September 16–17, 2002 and will be published in the conference volume I would like to thank the discussant Jerzy Pruski for his comments. Helpful comments were also received from Alina Carare, Warren Coats, Mariano Cortes, Diwa Guinigundo, Bernard Laurens, Andrea Schaechter and Mark Zelmer. The term “inflation targeting lite” arose during a conversation with Mark Swinburne.
GDP data from WEO database, end-2000 observations.
The starting date for the adoption of inflation targeting is the date at which a country is deemed to have had in place most of the elements of a full-fledged inflation targeting framework (Schaechter et al., 2000).
The exception is Mexico, which targets the aggregate commercial bank current account balance (corto) with the Banco de México.
Indeed, according to Fischer (2001): “…economies open to international capital flows have been and are in the process of moving away from adjustable peg exchange rate systems, some towards harder pegs, more towards systems with greater exchange rate flexibility.”
The medium and large emerging market economies with a CBA are: Brunei (1967), Bulgaria (1997), China, Hong Kong SAR (1983), Estonia (1992), and Lithuania (1994).