Economy Workshop | Klaus Schmidt-Hebbel We are pleased to invite you to take part in the workshop that will take place at Reconquista 266 - Lecture Room Dr. Ernesto Bosch on Thursday, November 3rd at 3.30 pm. Please confirm attendance by e-mail to: firstname.lastname@example.org
“The Past and Future of Inflation Targeting”
Inflation targeting (IT) was started in 1990 and spread subsequently to 35 other advanced and emerging/developing countries until now. Drawing from existing and new research, this paper takes stock of IT’s past performance and limitations, and discusses its main challenges to remain the monetary regime of choice in the future. Adopting and developing IT takes different forms but central banks gradually converge to a common policy framework – although the framework itself continues evolving over time. There is significant evidence on the success of IT – in particular for emerging economies and lower income countries – in improving central banks’ institutional set-up, conduct of monetary policy, and macroeconomic performance. The last decade presented the greatest challenges to IT, due to the commodity price shock of 2006-07 and then the Global Financial Crisis and its aftermath. The future of IT in general, and in developing countries in particular, will be determined by how well central banks manage the transition toward full-fledged stationary-target IT; improve their independence, transparency, and accountability; strengthen flexible IT without giving up low inflation as the key policy mandate; and evaluate seriously adoption of price-level targeting. Continuing IT adoption in developing countries is an encouraging sign of their capacity to face these challenges.
Klaus Schmidt-Hebbel is a permanent Professor of Economics at the Catholic University of Chile and Associate Professor of Economics at the University of Chile. He is also an international consultant, advisor and lecturer. Klaus Schmidt-Hebbel holds a PhD in Economics from the MIT. He is a commercial engineer and also holds a BA and MA in Economics from the Catholic University of Chile. He held a position as Chief Economist of the OECD, Economic Research Manager at the Central Bank of Chile, and Chief Economist at the World Bank. He was also advisor to several governments, multilateral agencies, associations and corporations in Chile and worldwide. His areas of interest include international finance, macroeconomics, monetary policy, and economic growth and development.
November 1st, 2016