Prospects for Inflation Targeting in the MENA Region: Feasibility, Desirability and Alternatives

Abstract Inflation targeting (IT) has recently become the dominant monetary policy prescription over the last decade. Emerging markets governments, in particular, are increasingly pressured to follow IT as part of their IMF-led stabilization packages and the routine rating procedures of the internat...

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Bibliographic Details
Published in:Review of Middle East Economics and Finance 2008-09, Vol.4 (3), p.3-100
Main Author: Yeldan, Erinc A
Format: Article
Language:English
Subjects:
Anti-inflation policy
Central banks
Economic growth
Economic stability
exchange rate determination
Inflation rate
Inflation targeting
Interest rate policy
Macroeconomics
MENA
Middle East
Monetary economics
Monetary policy
Money supply
North Africa
Stabilization policy
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Summary:Abstract Inflation targeting (IT) has recently become the dominant monetary policy prescription over the last decade. Emerging markets governments, in particular, are increasingly pressured to follow IT as part of their 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 macroeconomic stability and sustained growth has failed to materialize. This paper is an attempt to assess the desirability of the IT regime for a select group of MENA countries. I also argue that modern central banking ought to have more policy space in balancing out various objectives and instruments, and that central bank `independence' should not be equivalent to central bank `irrelevance.' Recommended Citation Yeldan, Erinc A. (2008) "Prospects for Inflation Targeting in the MENA Region: Feasibility, Desirability and Alternatives," Review of Middle East Economics and Finance: Vol. 4 : No. 3, Article 3. DOI: 10.2202/1475-3693.1193 Available at: http://www.bepress.com/rmeef/vol4/iss3/art3
ISSN:1475-3693
1475-3685
1475-3693
DOI:10.2202/1475-3693.1193