Communication key in inflation targeting
Communication is crucial in limiting the damage to central bank's credibility associated with overshooting inflation targets, notes a new paper from the International Monetary Fund.
The paper analyse monetary policy responses to rising inflation in emerging and developing countries in 2007 and the first half of 2008. The authors show that new communication challenges arise from the combination of higher inflation, slowing economic growth and a deepening financial crisis. Central banks need to
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