Inflation targeting and sudden stops.pdf英文资料.pdfVIP

This PDF is a selection from a published volume from the National Bureau of Economic Research Volume Title: The Inflation-Targeting Debate Volume Author/Editor: Ben S. Bernanke and Michael Woodford, editors Volume Publisher: University of Chicago Press Volume ISBN: 0-226-04471-8 Volume URL: /books/bern04-1 Conference Date: January 23-26, 2003 Publication Date: December 2004 Title: Inflation Targeting and Sudden Stops Author: Ricardo J. Caballero, Arvind Krishnamurthy URL: /chapters/c9565 10 Inflation Targeting and Sudden Stops Ricardo J. Caballero and Arvind Krishnamurthy 10.1 Introduction Underlying weaknesses in the domestic financial sector and limited integra- tion with world financial markets make emerging market economies vulner- able to “sudden stops” of capital inflows. Without much warning, the capi- tal flows that support a boom may come to a halt, exposing the country to an external crisis. Monetary policy in this context has often been seen as an additional source of problems rather than as a remedy. Countries with a history of in- flation problems have limited central-bank credibility. The currency pres- sures of the sudden stop test this credibility, so that either the loss of cred- ibility or the attempt to regain it in the middle of the crisis exacerbates the contraction. However, there is a group of countries for which the problem of high and unstable inflation is no longer present but the problem of sudden stops persists. These countries include Chile, Mexico, and many of the Asian economies. Moreover, looking toward the future, this group is bound to grow, as hopefully Brazil, Turkey, and countries of Eastern Europe estab- lish discipline over seigniorage and fiscal policies. Many of these advanced emerging economies are now in the process of Ricardo J. Caballero is the Ford International Professor of Economics at the Massachu- setts Ins