What measure of inflation should a developing country central bank target?

• 成果类型: Article
• 署名作者: Anand, Rahul; Prasad, Eswar S.; Zhang, Boyang
• 署名单位: International Monetary Fund; Cornell University; Cornell University
• 刊物名称: JOURNAL OF MONETARY ECONOMICS
• ISSN/ISSBN: 0304-3932
• DOI: 10.1016/j.jmoneco.2015.06.006
• 发表日期: 2015
• 页码: 102-116
• 关键词: Inflation targeting; Monetary policy framework; Core inflation; Headline inflation; financial frictions

摘要

In closed or open economy models with complete markets, targeting core inflation enables monetary policy to maximize welfare by replicating the flexible price equilibrium. We analyze this result in the context of developing economies, where a large proportion of households are credit constrained and the share of food expenditures in total consumption expenditures is high. We develop an open economy model with incomplete financial markets to show that headline inflation targeting improves welfare outcomes. We also compute the optimal price index, which includes a positive weight on food prices but, unlike headline inflation, assigns zero weight to import prices. (C) 2015 Elsevier B.V. All rights reserved.