Inflation targeting, employment creation and economic development: assessing the impacts and policy alternatives
Date
2008Source Title
International Review of Applied Economics
Print ISSN
0269-2171
Electronic ISSN
1465-3486
Publisher
Routledge
Volume
22
Issue
2
Pages
131 - 144
Language
English
Type
ArticleItem Usage Stats
155
views
views
1,073
downloads
downloads
Abstract
Inflation targeting (IT) has recently become the dominant monetary policy prescription for both developing and industrialized countries alike. Emerging market governments, in particular, are increasingly pressured to follow IT as part of their International Monetary Fund (IMF)-led stabilization packages and the routine rating procedures of the international finance institutions. However, the common expectation of IT promoters that price stability would ultimately lead to higher employment and sustained growth has failed to materialize. Generally, the current growth patterns of the world economy are too concentrated and uneven to generate sufficient capital investment and reduce unemployment. To contribute to the task of designing a more socially desirable macroeconomic policy environment, we offer concrete country case studies that devise viable alternatives to inflation targeting central bank policies in order to promote employment, sustained growth and improved income distribution.
Keywords
Central banksInflation targeting
Developing world
Economic development
Employment
Financial services
IMF
Income distribution
Inflation
Investment
Macroeconomics
Monetary policy