InflationTargetingInEmergingMarketsTheGlobalExperience.pdfVIP

Inflation Targeting In Emerging Markets: The Global Experience John B. Taylor Stanford University Keynote Address at the Conference on Fourteen Years of Inflation Targeting in South Africa and The Challenge of a Changing Mandate South African Reserve Bank Conference Centre Pretoria, South Africa October 30, 2014 In order to assess adequately the emerging market experience with inflation targeting in recent years, it is necessary to place the experience in the broader context of global monetary policy in which emerging markets are playing a growing and increasingly important part. During the past decade, the practice of monetary policy changed dramatically in many countries around the world. In some developed countries—the United States and euro area countries in particular—this change in policy was apparent before the global financial crisis, and it showed up as a deviation from the more rules-based policy of the 1980s and 1990s. This policy shift continued after the crisis and spread to other countries in what has been called the Global Great Deviation.1 It has been characterized by interest rate decisions that differed markedly from the 1980s and 1990s and by unconventional monetary policy actions, including quantitative easing in the form of large-scale purchases of securities. In my view this shift in policy has not been beneficial, but rather has been a factor in the deterioration of economic performance in the past decade. ??????????????????????