NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

NBER Working Papers by Arminio Fraga

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Working Papers

October 2003Inflation Targeting in Emerging Market Economies
with Ilan Goldfajn, Andre Minella: w10019
This paper assesses inflation targeting in emerging market economies (EMEs), and develops applied prescriptions for the conduct of monetary policy and inflation-targeting design in EMEs. We verify that EMEs have faced more acute trade-offs higher output and inflation volatility and worse performance than developed economies. These results stem from more pronounced external shocks, lower credibility, and lower level of development of institutions in these countries. In order to improve their performance, we recommend high levels of transparency and communication with the public and the development of more stable institutions. At an operational level, we propose a procedure that a central bank under inflation targeting can apply and communicate when facing strong supply shocks, and suggest...

Published:

December 1985Expected Fiscal Policy and the Recession of 1982
with William H. Branson, Robert A. Johnson: w1784
The Economic Recovery Tax Act of 1981 had one aspect that is unusually useful for economic analysis. It provided an example of a clear-cut announcement of future policy actions at specified dates.This provides an opportunity to apply recent advances in the analysis of expectations dynamics to data that have been generated in an environment that includes such announced and anticipated policy action. A three-stage future tax cut was announced in the Tax Bill in March 1981. In a Keynesian model with liquidity-constrained consumers or investors, or with uncertainity, this would normally be expected to provide a stimulus to the economy when the tax cuts actually appear. But the financial markets could look ahead to the stimulus and the shift in the high-employment deficit brought about by the t...

Published:

  • T. Peeters, et al, editors. International Trade and Exchange Rates in the Late Eighties. Amsterdam: North-Holland, 1985.
  • in M.H. Preston and R.T. Quandt, editors. "Prices, Competition and Equilibrium: Essays in Honor of W.J. Baremal." Totowa, NJ: Barnes and Noble, 1986. pp. 109-126

Contact and additional information for this authorAll NBER papers and publicationsNBER Working Papers only

 
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