Monetary Policy Frameworks For Emerging Markets

Edited by Gill Hammond, Director, CCBS, Bank of England, UK, Ravi Kanbur, T.H. Lee Professor of World Affairs, Cornell University, US and Eswar Prasad, Tolani Senior Professor of Trade Policy, Cornell University, US 2009368 pp

Financial globalization has made monetary policy formulation in emerging market economies increasingly complicated. This timely set of studies looks at the turmoil in global financial markets, which coupled with volatile inflation poses serious challenges for central banks in these countries. Featuring papers from the research frontier and front-line policymakers in developing and emerging market economies, the book address questions such as ‘What monetary policy framework is most suitable for these countries to confront the new challenges while they continue to open up to trade and financial flows?’, ‘What are the linkages between monetary stability and financial stability?’ and ‘Is inflation targeting or a fixed exchange rate regime preferable for developing and emerging markets?’
Contributors: P. Abradu-Otoo, C. Adam, W. Ramos de Alcântara, J. Aron, E. Buffie, P. Vieira da Cunha, J. De Gregorio, P. Disyatat, D. Dragutinovic, D. Fielding, M. Goodfriend, C. Goodhart, G. Hammond, D.H. Kalyalya, R. Kanbur, E. Levy-Yeyati, R. Mohan, J. Muellbauer, L. Niedermayer, B. Nijathaworn, S. O’Connell, M. Patra, C. Pattillo, D.S. Pires, E. Prasad, S. Singh, N.K. Sowa, F. Sturzenegger


Contents
List of contributors vii
Acknowledgements ix
PART I FRAMEWORKS FOR MONETARY POLICY
1 Monetary policy challenges for emerging market economies 3
Gill Hammond, Ravi Kanbur and Eswar Prasad
2 The pursuit of monetary and fi nancial stability in emerging
market economies 22
Bandid Nijathaworn and Piti Disyatat
3 Implementation of infl ation targets in emerging markets 40
José De Gregorio
4 Whatever became of the monetary aggregates? 59
Charles Goodhart
5 Fear of appreciation: exchange rate policy as a development strategy 69
Eduardo Levy-Yeyati and Federico Sturzenegger
6 Aid reversals, credibility and macroeconomic policy 95
Edward Buffi e, Christopher Adam, Stephen O’Connell and Catherine Pattillo
PART II COUNTRY EXPERIENCES
7 The nexus between monetary and fi nancial stability: the experience of selected Asian economies 117
Sukudhew Singh
8 A framework for independent monetary policy in China 136
Marvin Goodfriend and Eswar Prasad
9 Monetary policy transmission in India 153
Rakesh Mohan and Michael Patra
10 Infl ation targeting and exchange rate: notes on Brazil’s experience 180
Paulo Vieira da Cunha, Daniela Silva Pires and Wenersamy Ramos de Alcântara
11 Czech experience with infl ation targeting 201
Luděk Niedermayer
12 Monetary and fi scal policy mix in Serbia: 2002–07 219
Diana Dragutinovic
13 Aid volatility, monetary policy rules and the capital account
in African economies 237
Christopher Adam, Stephen O’Connell and Edward Buffi e
14 Regional asymmetries in the impact of monetary policy on prices: evidence from Africa 261
David Fielding
15 Monetary policy and infl ation modeling in a more open economy in South Africa 275
Janine Aron and John Muellbauer
16 Infl ation management and monetary policy formulation in Ghana 309
Nii Kwaku Sowa and Philip Abradu-Otoo
17 Monetary policy in Zambia: experience and challenges 330
Denny H. Kalyalya
Index 347