@techreport{NBERw14561,
 title = "Inflation Targeting and Real Exchange Rates in Emerging Markets",
 author = "Joshua Aizenman and Michael Hutchison and Ilan Noy",
 institution = "National Bureau of Economic Research",
 type = "Working Paper",
 series = "Working Paper Series",
 number = "14561",
 year = "2008",
 month = "December",
 URL = "http://www.nber.org/papers/w14561",
 abstract = {We investigate inflation targeting (IT) in emerging markets, focusing on the role of the real exchange rate and the distinction between commodity and non-commodity exporters. IT emerging markets appear to follow a “mixed strategy” whereby both inflation and real exchange rates are important determinants of policy interest rates. The response to real exchange rates, however, is more constrained than in non-IT regimes. We also find that the response to real exchange rates is strongest in those countries following IT policies that are relatively intensive in exporting basic commodities; and present a theoretical model that explains these empirical results. },
}