In the past three decades, many advanced market and emerging market economies have modernized their monetary policy frameworks. We research the experience of these economies for lessons relevant to the monetary policy in Ukraine, which has recently embarked on a similar modernization program. Most countries we study have adopted some form of inflation targeting, given unfavorable experiences with previous regimes based on money and exchange rate, however with the exchange rate continuing to play an important role. Most of the pillars of effective IT monetary policy developed over time through determined efforts led by central banks, and the initial conditions did not matter for success. Countries have experienced numerous challenges with regards to communication, credibility, policy transmission, and fiscal dominance. Overcoming these challenges gave rise to new practices, which now form the stateof- the art monetary policy, irrespective of whether it is called an IT regime. A general lesson for Ukraine (as well as other future modernizers and IT adopters) is that determination and speed in building the pillars of IT policy is paramount for success and credibility of the new framework.
Armas, A., Grippa, F. (2005). Targeting inflation in a dollarized economy: The Peruvian experience. Working Paper, 448. Inter-American Development Bank. https://doi.org/10.2139/ssrn.1818737
Ball, L., Sheridan, N. (2005). Does inflation targeting matter? In: Bernanke B., Woodford, M. (Eds), The Inflation Targeting Debate, pp. 249-276. Chicago: The University of Chicago Press. https://doi.org/10.7208/chicago/9780226044736.003.0007
Baqueiro, A., de Leon, A., Torres A. (2003). Fear of floating of fear of inflation? The role of the exchange rate pass-through in monetary policy in a changing environment. BIS Papers, 19, 338-354.
Barajas, A., Steiner, R., Villar, L., Pabon, C. (2014). Inflation targeting in Latin America. Working Paper, 473. Inter-American Development Bank. https://doi.org/10.2139/ssrn.2377644
Barran, F. (2005). Uruguay's Disorderly Exit from Peg to Float. IMF Mimeo.
Batini, N., Kuttner, K., Laxton, D. (2005). Does inflation targeting work in emerging markets? World Economic Outlook, Ch. 4. International Monetary Fund.
Batini, N., Laxton, D. (2006). Under what conditions can inflation targeting be adopted? The experience of emerging markets. Working Paper, 406. Central Bank of Chile.
Benes, J., Berg, A, Portillo, R., Vavra, D. (2014). Modeling sterilized interventions and balance sheet effects of monetary policy in a New-Keynesian Framework. Open Economics Review, 26, 81-108. https://doi.org/10.1007/s11079-014-9320-1
Blinder, A. (1998). Central Banking in Theory and Practice. Cambridge: MIT Press.
Blinder, A., Ehrmann, M., Fratzscher, M., De Haan, J., Jansen, D-J. (2008). Central bank communication and monetary policy: a survey of theory and evidence. Working Paper, 13932. National Bureau of Economic Research. https://doi.org/10.3386/w13932
Capek, A., Hledik, T., Kotlan, V., Polak, S., Vavra, D. (2003). Historical perspective on the development of the forecasting and policy analysis system. In Coats, W., Laxton, D., Rose, D. (eds). The Czech National Bank's Forecasting and Policy Analysis System, Ch. 1, pp. 7-25. Czech National Bank. Retrieved from http://www.douglaslaxton.org/sitebuildercontent/sitebuilderfiles/CLR.pdf
Carare, A., Schaechter, A., Stone, M., Zelmer, M. (2002). Establishing initial conditions in support of inflation targeting. Working Paper, 02-102. International Monetary Fund. https://doi.org/10.5089/9781451852622.001
Carare, A., Stone, M. R. (2003). Inflation targeting regimes. Working Paper, 03-9. International Monetary Fund. https://doi.org/10.5089/9781451842616.001
Castaneda, J. C., Castillo, C. E. (2005). supply shocks in the transition towards an inflation targeting reform: An empirical evidence for Guatemala. Working Paper, 354. Central Bank of Chile.
Central Bank of Brazil (1999). Monetary policy operating procedures in Brazil. Policy Paper, 5. Bank for International Settlements.
Chailloux, A., Ohnsorge, F., Vavra, D. (2010). Euroization in Serbia. Working Paper Series, 2010-120. European Bank for Reconstruction and Development.
Corbo, V., Schmidt-Hebbel, K. (2001). Inflation targeting in Latin America. Working Paper, 105. Central Bank of Chile.
Coulibaly, D., Kempf, H. (2010). Does inflation targeting decrease exchange rate pass-through in emerging countries? Working Papers, 303. Banque de France. https://doi.org/10.2139/ssrn.1706025
de Carvalho Filho, I. E. (2010). Inflation targeting and the crisis: an empirical assessment. Working Paper, 10-45. International Monetary Fund. https://doi.org/10.5089/9781451963045.001
de Gregorio, J. (2013). Resilience in Latin America: lessons from macroeconomic management and financial policies. Working Paper, 13-259. International Monetary Fund. https://doi.org/10.5089/9781475550214.001
Debelle, G., Lim, G. C. (1998). Preliminary considerations of an inflation targeting framework for the Philippines. Working Paper, 98-39. International Monetary Fund. https://doi.org/10.5089/9781451845808.001
Duttagupta, R., Fernandez, G., Karacadag, C. (2004). From fixed to float: operational aspects of moving toward exchange rate flexibility. Working Paper, 04-126. International Monetary Fund. https://doi.org/10.5089/9781451854930.001
Eichengreen, B., Hausmann, R. (1999). Exchange rates and financial fragility. Working Paper Series, 7418. National Bureau of Economic Research. https://doi.org/10.3386/w7418
Elberg, A., Corbo, V., Tessada, J. (1999). Monetary policy in Latin America: Underpinnings and procedures. Cuadernos de Economia, 109, 897-927.
Fane, G. (2005). Post-crisis monetary and exchange rate policies in Indonesia, Malaysia and Thailand. Bulletin of Indonesian Economic Studies, 41(2), 175-195. https://doi.org/10.1080/00074910500117024
Freedman, C., Lexton, D. (2009). Why inflation targeting? Working Paper, 09-86. International Monetary Fund. https://doi.org/10.5089/9781451873085.001
Freedman, C., Otker-Robe, I. (2009). Country experiences with the introduction and implementation of inflation targeting. Working Paper, 09-161. International Monetary Fund. https://doi.org/10.5089/9781455200726.001
Freedman, C., Otker-Robe, I. (2010). Important elements for inflation targeting for emerging economies. Working Paper, 10-113. International Monetary Fund. https://doi.org/10.5089/9781455200726.001
Galindo, L. M., Ros, J. (2006). Alternatives to inflation targeting in Mexico. In Gerald A. Epstein, G.A., Yeldan, A. E. (eds). Beyond Inflation Targeting: Assessing the Impacts and Policy Alternatives, Ch. 8. https://doi.org/10.4337/9781849801980.00017
Gemayel, E. R., Jahan, S., Peter, A. (2011). What can low-income countries expect from adopting inflation targeting? Working Paper, 11-276. International Monetary Fund. https://doi.org/10.5089/9781463925932.001
Goldstein, M. (2002). Managed floating plus. Policy Analyses in International Economics, 66.
Gomez, J., Uribe J.D., Vargas H. (2002). The Implementation of Inflation Targeting in Colombia. Retrieved from http://banrep.gov.co/docum/ftp/borra202.pdf
Goncalves, C. E. S., Salles, J. M. (2008). Inflation targeting in emerging economies: What do the data say? Journal of Development Economics, 85(1-2), 312-318. https://doi.org/10.1016/j.jdeveco.2006.07.002
Gurkaynak, R. S., Sack, B. P., Swanson, E. T. (2004). Do actions speak louder than words? The response of asset prices to monetary policy actions and statements. Working Paper, 2004-66. Federal Reserve System. https://doi.org/10.2139/ssrn.633281
Habermeier, K., Otker-Robe, I., Jacome, L., Giustiniani, A., Ishi, K., Vavra, D., Kişinbay, T., Vazquez, F. (2009). Inflation pressures and monetary policy options in emerging and developing countries: A cross regional perspective. Working Paper, 09-1. International Monetary Fund. https://doi.org/10.5089/9781451871487.001
Hamann, F., Hofstetter, M., Urrutia, M. (2014). Inflation targeting in Colombia, 2002-2012. Working Paper Series, 487. Banco de la República. https://doi.org/10.32468/be.818
Hammond, G. (2012). State of the art of inflation targeting – 2012. Handbook, 29. Bank of England.
Holub, T. (2004). Foreign exchange interventions under inflation targeting: The Czech experience. Research and Policy Notes, 2004-01. Czech National Bank.
Hurnik, J., Tuma, Z., Vavra, D. (2010). The Czech Republic on its way to the euro: A stabilization role of monetary policy revisited. In Nowotny, E., Mooslechner, P., Ritzberger-Grünwald, D. (eds). The Euro and Economic Stability Focus on Central, Eastern and South-Eastern Europe, Ch. 5. https://doi.org/10.4337/9781849805698.00013
Hurnik, J., Tuma, Z., Vavra, D. (2010). The euro adoption debate revisited: The Czech case. Czech Journal of Economics and Finance, 60(3), 194-212.
International Monetary Fund (2005). World Economic Outlook (Washington, September).
Josifidis, K., Pucar, E. B., Srdic, S., Ivan, G. (2014). Inflation targeting in advanced vs. emerging economies before and after the crisis. Panoeconomicus, 61(1), 79-106. https://doi.org/10.2298/pan1401079j
Kubo, A. (2009). Monetary targeting and inflation: Evidence from Indonesia's post-crisis experience. Economics Bulletin, 29(3), 1805-1813.
Lamberte, M. B. (2002). Central banking in the Philippines: then, now and the future. Discussion Paper Series, 2002-10. Philippine Institute for Development Studies.
Levin, A. T., Natalucci, F. M., Piger, J. (2004). Explicit inflation objectives and macroeconomic outcomes. Working Paper Series, 0383. European Central Bank.
Lim, J. (2006). Philippine monetary policy: A critical assessment and search for alternatives. Retrieved from http://www.peri.umass.edu/fileadmin/pdf/inflation/lim_paper10.pdf
Martinez, G. O. (2008). Inflation targeting. Retrieved from http://www.imf.org/external/np/seminars/eng/2011/res/pdf/go2.pdf
Masson, P. R., Savastano, M. A., Sharma, S. (1998). Can inflation targeting be a framework for monetary policy in developing countries? Finance and Development, 35, 34-37.
McLeod, R. (2002). Toward improved monetary policy in Indonesia. Working Paper, 10. Australian National University.
Medina Cas, S., Carrion-Menendez, A., Frantischek, F. (2011). Improving the monetary policy frameworks in Central America. Working Paper, 11-245. International Monetary Fund. https://doi.org/10.5089/9781463923242.001
Minelli, A. (2005). Transition to a floating exchange rate regime: The Brazilian experience. IMF Mimeo.
Mishkin, F. S. (2004). Can inflation targeting work in emerging market countries? Working Paper, 10646. National Bureau of Economic Research. https://doi.org/10.3386/w10646
Mishkin, F. S., Schmidt-Hebbel, K. (2006). Monetary policy under inflation targeting: An introduction. Working Paper, 396. Banco Central de Chile.
Mishkin, F. S., Schmidt-Hebbel, K. (2007). Does inflation targeting make a difference? Monetary Policy under Inflation Targeting, XI, 291-372. Banco Central de Chile.
Nowotny, E., Mooslechner, P., Ritzberger-Grunwald, D. (2010). The euro and economic stability: Focus on Central, Eastern and South-Eastern Europe. https://doi.org/10.4337/9781849805698
Ostry, J. D., Ghosh, A. R., Chamon, M. (2012). Two targets, two instruments: Monetary and exchange rate policies in emerging market economies. Staff Discussion Note, 12-01. International Monetary Fund. https://doi.org/10.5089/9781475503623.006
Otker-Robe, I., Polanski, Z., Topf, B., Vavra, D. (2007). Coping with capital inflows: experiences of selected European countries. Working Paper, 07-190. International Monetary Fund. https://doi.org/10.5089/9781451867541.001
Otker-Robe, I., Vavra, D. (2007). Moving to greater exchange rate flexibility operational aspects based on lessons from detailed country experiences. Occasional Papers, 256. International Monetary Fund. https://doi.org/10.5089/9781589066243.084
Parkin, M. (2014). The effects of central bank independence and inflation targeting on macroeconomic performance: Evidence from natural experiments. Review of Economic Analysis, 6, 1-35.
Polanski, Z. (2005). Poland's experience in dealing with capital inflows: Policies, challenges and effectiveness of measures. IMF Mimeo.
Polanski, Z., Szpunar, P. (2005). Poland's gradual and orderly exit to exchange rate flexibility: Pace, sequencing and challenges. IMF Mimeo.
Poon, W. C., Lee, Y. S. (2014). Inflation targeting in Asean-10. South African Journal of Economics, 82(1), 141-157. https://doi.org/10.1111/saje.12028
Psalida, L. E., Elsenburg, W., Jobst, A., Masaki, K., Nowak, S. (2009). Market interventions during the financial crisis: How effective and how to disengage? Global Financial Stability Report, Ch. 3.
Ramos-Francia, M., Garcia, A. T. (2005). Reducing inflation through inflation targeting: The Mexican experience. Working Paper, 2005-01. Banco de Mexico.
Reichlin, L., Baldwin, R. (2013). Is inflation targeting dead? Central Banking after the Crisis. Vox eBook. Retrieved from http://www.voxeu.org/sites/default/files/file/P248%20inflation%20targeting%282%29.pdf
Roger, S. (2010). Inflation targeting turns 20. Finance & Development, 47(1), 46-49.
Roger, S., Restrepo J. E., Garcia, C. (2009). Hybrid inflation targeting regimes. Working Paper, 234. International Monetary Fund.
Schmidt-Hebbel, K., Werner, A. (2002). Inflation targeting in Brazil, Chile, and Mexico: Performance, credibility, and the exchange rate. Working Paper, 171. Central Bank Of Chile. https://doi.org/10.1353/eco.2002.0007
Siregar, R. Y., Goo, S. (2009). Effectiveness and commitment to inflation targeting policy: Evidences from Indonesia and Thailand. Staff Paper, 73. The South East Asian Central Banks.
Sotocinal, N. R. (2010). Inflation targeting and interest rate rules: A characterization of the Philippine case. Discussion Paper, 1001. UP College of Business Administration.
Stone, M. (2003). Inflation targeting lite. Working Paper, 03-12. International Monetary Fund. https://doi.org/10.5089/9781451842920.001
Taguchi, H., Kato, C. (2010). Assessing the performance of inflation targeting in East Asian economies. Macroeconomics Working Papers, 23078. East Asian Bureau of Economic Research.
Tapsoba, R. (2010). Does inflation targeting improve fiscal discipline? An empirical investigation. Working Paper, 201020. CERDI.
Topf, B. (2005a). Dealing with capital inflows: The Israeli experience. IMF Mimeo.
Topf, B. (2005b). Transition to greater exchange rate flexibility: The Israeli experience. IMF Mimeo.
Valdes, J. A. B. (2007). The conduct of monetary policy in Central America and Dominican Republic, in an Increasingly Globalised Environment. Retrieved from http://www.secmca.org/INVESTIGACIONES_ECONOMICAS/InvestigacionesSECMCA/barbados.pdf
van der Merwe, E. J. (2004). Inflation targeting in South Africa. Occasional Paper, 19. South African Reserve Bank.
Vavra, D. (2005a). Czech experience with exit to float. IMF Mimeo.
Vavra, D. (2005b). The Czech Republic: Dealing with capital inflows. IMF Mimeo.