event description

Inflation Targeting (IT) has increasingly become the modern framework for formulating and implementing monetary policy globally. What began as a strategy suitable for only advanced countries whose fiscal and monetary institutions were strong with developed financial markets, is being adopted in emerging and developing countries with relatively weak institutions and less developed financial markets. The new wisdom is that among the numerous merits of IT lies the fact that its adoption can be the source of strengthening of the monetary institution and the development of the financial markets rather than a precondition. Given this wisdom and the rapid financial innovations and integration of financial markets globally, many countries, including the COMESA region, have transitioned or are planning to transition to this framework.

The preference for IT over other mostly old age monetary policy frameworks is premised on the belief that, IT solves the dynamic consistency problem which produces high average inflation. It also reduces inflation variability, and if “flexible” it can also stabilize output. IT also locks in expectations of low inflation, which reduces the inflationary impact of macroeconomic shocks. For these reasons and many others, many economists have advocated for this framework as the right approach to monetary policymaking.

Given the fast-growing popularity of this monetary policy regime, the broad objective of this course is to explain the different components of the IT regime highlighting the theory, practical considerations, and experiences of Inflation Targeters for the benefit of COMESA region central banks.

Target Audience 

The course targets Economists interfacing with monetary policy formulation and implementation in Central Banks. Participants are expected to have an advanced degree in Economics or relevant experience with monetary policy formulation or implementation.