In conventional monetary policy, the aim is to stabilise inflation by adjusting monetary policy tools, mainly interest rates. One regime that has grown in popularity is inflation targeting and average inflation in both emerging and advanced economies is lower after the adoption of this regime. Yet, emerging markets have relatively worse performance regarding the deviations in their inflation rates. Are inflation targeters in emerging markets less committed to achieving their targets? Or is it that inflation targeting in emerging markets more challenging? In an attempt to better understand how monetary policy in emerging markets works, ERSA’s podcast host sits down with Prof Nicola Viegi, the SARB Chair in Monetary Economics from the University of Pretoria, to discuss his research entitled “Trouble Every Day: Monetary Policy in and Open Emerging Economy”, conducted with co-authors Ekaterina Pirozhkova and Giovanni Ricco. Listen to this podcast to uncover insights from their research. How important are clarity and transparency with regards to monetary policy communication? How do financial markets respond to monetary policy communication? And despite having a problem with data availability, why is South Africa a good candidate for inflation targeting? Drawing from his unparalleled experience, Prof Viegi shares his insights and even sheds some light on topics from the IMF’s Integrated Policy Framework to Home Affairs! This podcast is not to be missed.
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