Inflation Targeting: Proposals for a Permanent Regime

Vol. 22 No. 3 (2002)

Jul-Sep / 2002
Published July 1, 2002
PDF-Portuguese (Português (Brasil))
PDF-Portuguese (Português (Brasil))

How to Cite

Giambiagi, Fabio, and José Carlos Carvalho. 2002. “Inflation Targeting: Proposals for a Permanent Regime”. Brazilian Journal of Political Economy 22 (3):408-28.

Inflation Targeting: Proposals for a Permanent Regime

Fabio Giambiagi
Economista do BNDES, Rio de Janeiro/RJ, Brasil
José Carlos Carvalho
Economista do IGP Asset Management, Rio de Janeiro/RJ, Brasil.
Brazilian Journal of Political Economy, Vol. 22 No. 3 (2002), Jul-Sep / 2002, Pages 408-428


In 1999 the inflation targeting regime was introduced in Brazil in an environment plenty of uncertainties and relatively high inflation rates. As a consequence, the set of rules that to this day govern the Brazilian regime still lack a strong institutional support. This paper makes some proposals for a permanent inflation targeting regime. In doing so, we discuss how can a greater institutional commitment be achieved with the inflation targeting setup. We also discuss issues on what the permanent inflation target level should be and also how much deviation from the target should be tolerated. Based on these issues, we suggest a set of rules to be adopted in Brazil.

JEL Classification: E52; E58.

Keywords: Monetary policy inflation inflation targets