Alternatives to Inflation Targeting in Mexico

Galindo, Luis Miguel; Ros, Jaime

doi:10.4337/9781849801980.00017

Cited by 17 publications

(27 citation statements)

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“…Mexico followed a persistent real appreciation trend between late 1996 and early 2002 with a RER even more appreciated (about 8 per cent lower) than the year before the tequila crisis (1994) Several authors have highlighted the greater volatility and the appreciation bias that characterised the behaviour of the RER in the LA FIT countries during this period. Galindo and Ros (2008) show that the FIT arrangement in Mexico had an appreciation bias. Using a VAR model, they find that this resulted from an asymmetric monetary policy, which was tightened when the NER depreciated, but not loosened when it appreciated.…”

Section: The 2000smentioning

confidence: 89%

Exchange rate regimes in the major Latin American countries since the 1950s: lessons from history

Frenkel¹,

Rapetti²

2012

RHE / JILAEH

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The paper analyses exchange rate regimes implemented by the major Latin American (LA) countries since the 1950s, with special attention to the period beginning in the 1970s. The aim is to evaluate the relationship between exchange rate regimes and macroeconomic performance. After an overview of the main trends followed by the major LA countries over the last 60 years, the paper focusses on regimes that were implemented (1) with stabilisation purposes (nominal anchor) and (2) with the aim of targeting competitive and stable real exchange rates. These sections analyse in greater detail some important links between exchange rate regimes and macroeconomic performance. The paper closes with an assessment of the experiences with exchange rate regimes in LA.

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Section: The 2000smentioning

confidence: 89%

Exchange rate regimes in the major Latin American countries since the 1950s: lessons from history

Frenkel¹,

Rapetti²

2012

RHE / JILAEH

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“…(Masson et al, 1997); the Czech Republic and Hungary (Jonas and Mishkin, 2003;Bulir et al, 2007l); Iceland (Baldursson and Hall, 2008); Canada (Koeppl, 2009;Masson et al, 1997); Turkey (Ersel and Özatay, 2007); Mexico (Galindo and Ros, 2005;Carstens and Werner); Korea (Hoffmaister, 1999); South Africa (Jonsson, 1999).…”

Section: Discussionmentioning

confidence: 99%

“…More interesting here is the lack of a firm statistical linkage between inflation and monetary policy instruments (such as policy interest rates), discussed by Christoffersen and Wescott (1999). Carstens and Werner (1999) and Galindo and Ros (2005) argue that Mexico's experience has shown that the floating exchange rate regime adopted by the monetary authorities was not an obstacle for the implementation of inflation targeting. Instead, its contribution was significant regarding the capital movements (short-term inflows) and external shocks.…”

Section: Inflation Targeting As a Framework For Monetary Policy In Dementioning

confidence: 99%

Inflation Targeting in Practice: A Survey

Petrova¹

2012

IJBM

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Since its first introduction in New Zealand in 1990, inflation targeting has been successfully adopted in several industrialized countries-Canada, the United Kingdom, Sweden, Finland, Australia in the early 1990s; and Iceland and Norway a decade later. More recently, several emerging market economies (Mexico, Israel, Chile, and Brazil among them) have tried to move in the same direction. I have performed a cross-country comparison of the application of inflation targeting framework. Reviewing case studies and empirical evidence from the past twenty years, I present and summarize the most recent results and practical issues experienced by the emerging market economies, as well as the necessary steps that should be considered to ensure a successful implementation.

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“…over-valued exchange rates (e.g., Galindo and Ros, 2008;Barbosa-Filho, 2008). In these cases, the high interest rates needed to keep inflation low attract short-term capital inflows which can lead to an appreciation of the real exchange rate.…”

Section: Researchers In Latin America Raise Concerns That Inflation Tmentioning

confidence: 99%

“…Another channel through which inflation targeting may negatively affect the trajectory of development is through the real exchange rate and financial volatility (Galindo and Ros, 2008;Barbosa-Filho, 2008;Cordero, 2008). In economies with relatively unrestricted capital mobility and reasonably developed capital markets, the high interest rates associated with inflation targeting often attract inflows of short-term portfolio investment.…”

Section: Inflation Targeting: An Overview Of Key Issuesmentioning

confidence: 99%

Is There a Case for Formal Inflation Targeting in Sub-Saharan Africa?

Ndikumana

Heintz

2010

SSRN Journal

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This paper examines the question of whether inflation targeting monetary policy is an appropriate framework for sub-Saharan African countries. The paper presents an overview of inflation targeting, reviews the justification for the regime, and summarizes some major critiques. Monetary policy responses to inflation depend on the source of inflationary pressures. Therefore, the determinants of inflation in African countries are investigated, using dynamic panel data, and the implications for inflation targeting are discussed. These issues are examined in greater detail for the two African countries which have formally adopted inflation targeting, South Africa and Ghana. The analysis is placed in the context of the global economic crisis. The paper concludes with a discussion of alternative approaches to monetary policies and the institutional constraints that would need to be addressed to allow central banks to play a stronger developmental role in sub-Saharan African countries.

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Alternatives to Inflation Targeting in Mexico

Cited by 17 publications

References 0 publications

Exchange rate regimes in the major Latin American countries since the 1950s: lessons from history

Exchange rate regimes in the major Latin American countries since the 1950s: lessons from history

Inflation Targeting in Practice: A Survey

Is There a Case for Formal Inflation Targeting in Sub-Saharan Africa?

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