Inflation target debated by specialists in Rio
The global financial crisis required central banks across the world to adopt more efficient monetary policy measures, to help countries get through the period of turbulence and support their economies. One of the mechanisms used was inflation control through target setting. Luiz Awazu Pereira da Silva, the deputy general manager of the Bank for International Settlements, who has a PhD in economics, was in Brazil on August 12 to present his opinion on this topic, at the invitation of the Brazilian Institute of Economics (FGV IBRE). The event also featured economists Pedro Malan (a former finance minister) and Edmar Bacha (a member of Brazilian Academy of Literature and a former president of IBGE).
During the event, Pereira da Silva discussed the book “Integrated inflation targeting – Another perspective from the developing world,” recently published by the Bank for International Settlements. This book, written by him in partnership with economist Pierre-Richard Agénor (University of Manchester), provides an in-depth analysis of recent experiences with inflation targets.
The book reflects on key economic challenges experienced since the global crisis and the way middle-income countries have tackled these problems. It addresses the characteristics of the financial system, looks at inflation target regimes in place around the world (including a comparison of countries and evaluation of these regimes’ performance), examines their impacts on the volume of capital flows, and analyzes difficulties in adopting them. The book also discusses the importance of macroprudential regulation and evidence that these extra-political monetary measures, if adopted together with decreases or increases in interest rates, can contribute more effectively to inflation control.
The book is free to download on this website.