Political Economy Policy Institute Conference on "Inflation Targetting"

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"Inflation targeting"—a monetary policy focused almost exclusively on keeping inflation in the low single digits—has become the operational objective for many central banks around the world. Many economists, international organizations like the IMF, and central bankers have promoted inflation targeting to the exclusion of other concerns. The policy's record has been rather disappointing. After several decades of experience with the inflation focused approach, problems of employment creation and poverty are mounting around the world.

Gerald Epstein of PERI, together with Erinc Yeldan of Bilkent University in Turkey, convened an international team of economists to develop more socially useful alternatives to inflation targeting central bank policy: policies that promote more employment, reduce poverty, and generate economic growth while also keeping inflation moderate and stabilizing the exchange rate. The research collected here provides case studies of country experiences with inflation targeting, as well as studies on the role of gender in monetary policy and inflation’s effects on growth and poverty. Combined, this research forges a new approach to monetary policy, one that makes central banks part of the solution to poverty and unemployment, rather than an important part of the problem. This project was made possibly by the generous support of the Ford Foundation and Rockefeller Brothers' Fund and the United Nations Department of Economic and Social Affairs (UN-DESA).

>> Read more about Alternatives to Inflation Targeting

Epstein, Gerald and Erinc Yeldan:  "Inflation Targeting: Bad Medicine, But Help is within Reach." (.pdf forthcoming)

Frenkel, Roberto and Lance Taylor, "Real Exchange Rates, Monetary Policy and Employment."

Pollin, Robert and Andong Zhu, “Inflation and Economic Growth: A Cross-Country, Non-Linear Analysis.”

Jayadev, Arjun , "The Class Content Of Preferences Towards Anti-Inflation And Anti-Unemployment Policies."

Braunstein, Elissa and James Heintz, “Gender Bias and Central Bank Policy: Employment and Inflation Reduction.”

Barbosa-Filho, Nelson H., “Inflation Targeting in Brazil: Is There An Alternative?”

Galindo, Luis Miguel and Jaime Ros, “Inflation Targeting in Mexico: An Empirical Appraisal.”

Frenkel, Roberto and Martin Rapetti, “Monetary and Exchange Rate Policies in Argentina After the Convertibility Regime Collapse.”

Jha, Raghbendra “Inflation Targeting in India: Issues and Prospects.”

Lim,  Joseph, "Philippine Monetary Policy: A Critical Assessment and Search for Alternatives."

Packard, Le Anh Tu, “Monetary Policy in Vietnam: Alternatives to Inflation Targeting.”

Voyvoda, Ebru and Erinc Yeldan, “Macroeconomics of Twin Targeting in Turkey: A General Equilibrium Analysis.”

Epstein, Gerald, “A Proposal for Employment Targeting Monetary Policy in South Africa.” (.pdf forthcoming)

Brief introduction

Last 25 years have shown a sharp slowdown in the growth of GDP per capita, a decline in the rate of improvement for life expectancy, (both adult and child) mortality rate, a drastic reduction in the rate of public spending especially on education and other social spending.

Since the last 25 years is characterized by the age of "globalization" or "liberalization," it is quite plausible to guess that there is close linkage or causal relationship between these socioeconomic results (the aggravation of the overall quality of life) and the unfettered liberalization policy.

In the following research paper, the author Mark Weibrot, et. al traces the patterns of economic growth in most countries in the world and the changes in public policy. He concludes that even though it is difficult to attribute these survey results to the single policy change driven by blind globalization policy, it is not unjustifiable to say that further debates and researches should pay attention to the effects of globalization before adopting any drastic policy change. 

The Scorecard on Development - 25 Years of Diminished Progress

http://www.cepr.net/publications/development_2005_09.pdf