Inflation Targeting in Korea: An Empirical Exploration

January 1, 1999

Preview Citation

Format: Chicago

Willy A Hoffmaister. Inflation Targeting in Korea: An Empirical Exploration, (USA: International Monetary Fund, 1999) accessed November 9, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

The revised Bank of Korea Act states that the primary goal of monetary policy is price stability, suggesting that monetary policy will move toward an inflation-targeting framework. The paper explores some of the practical aspects of this move, including such issues as the predictability of inflation, the definition of the price index, the inflation target’s time horizon, and the width of the inflation-target bands. On balance, the empirical evidence suggests that Korea is likely to be successful in adopting an inflation-targeting framework over the medium term.

Subject: Economic forecasting, Inflation, Inflation targeting, Monetary base, Monetary policy, Monetary policy frameworks, Money, Prices

Keywords: Agents inflation expectation, Exchange rate, Food price inflation shock, Inflation, Inflation outcome, Inflation Targeting, IT country, IT experiment, IT framework, IT simulation, Korea, Monetary base, Monetary policy frameworks, Price index, Real interest rate, Standard deviation, Target band, Target horizon, Transmission lag, WP

Publication Details

Pages:

55
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 1999/007
Stock No:

WPIEA0071999
ISBN:

9781451842395
ISSN:

1018-5941

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