Table Of ContentBeyond Infl ation Targeting
Beyond Infl ation
Targeting
Assessing the Impacts and Policy Alternatives
Edited by
Gerald A. Epstein
Political Economy Research Institute (PERI), University of
Massachusetts Amherst, USA
A. Erinç Yeldan
Bilkent University, Ankara, Turkey and International
Development Economics Associates (IDEAs), India
Edward Elgar
Cheltenham, UK • Northampton, MA, USA
© Gerald A. Epstein and A. Erinç Yeldan 2009
All rights reserved. No part of this publication may be reproduced, stored in a
retrieval system or transmitted in any form or by any means, electronic,
mechanical or photocopying, recording, or otherwise without the prior
permission of the publisher.
Published by
Edward Elgar Publishing Limited
The Lypiatts
15 Lansdown Road
Cheltenham
Glos GL50 2JA
UK
Edward Elgar Publishing, Inc.
William Pratt House
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Northampton
Massachusetts 01060
USA
A catalogue record for this book
is available from the British Library
Library of Congress Control Number: 2009933402
ISBN 978 1 84720 938 2
Printed and bound by MPG Books Group, UK
Contents
List of contributors vii
List of abbreviations xii
Preface xiii
PART I INTRODUCTION AND THEORETICAL
FRAMEWORKS
1 Beyond infl ation targeting: assessing the impacts and policy
alternatives 3
Gerald Epstein and A. Erinç Yeldan
2 Real exchange rate, monetary policy and employment:
economic development in a garden of forking paths 28
Roberto Frenkel and Lance Taylor
3 Infl ation targeting and the real exchange rate in a small
economy: a structuralist approach 44
Jose Antonio Cordero
PART II THEMATIC ISSUES: CLASS RELATIONS AND
GENDER IMPACTS OF INFLATION TARGETING
4 Income, class and preferences towards anti-infl ation and
anti-unemployment policies 71
Arjun Jayadev
5 The gendered political economy of infl ation targeting:
assessing its impacts on employment 93
Elissa Braunstein and James Heintz
6 Infl ation and economic growth: a cross-country non-linear
analysis 116
Robert Pollin and Andong Zhu
PART III INFLATION TARGETING: CRITIQUES AND
COUNTRY-SPECIFIC ALTERNATIVES
7 Infl ation targeting in Brazil: 1999–2006 139
Nelson H. Barbosa-Filho
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vi Beyond infl ation targeting
8 Alternatives to infl ation targeting in Mexico 158
Luis Miguel Galindo and Jaime Ros
9 Five years of competitive and stable real exchange rate in
Argentina, 2002–07 179
Roberto Frenkel and Martín Rapetti
10 A general equilibrium assessment of twin-targeting in Turkey 203
Cagatay Telli, Ebru Voyvoda and A. Erinç Yeldan
11 Employment targeting central bank policy: a policy proposal
for South Africa 227
Gerald Epstein
12 Infl ation targeting and the design of monetary policy in India 248
Raghbendra Jha
13 Towards an alternative monetary policy in the Philippines 271
Joseph Anthony Lim
14 Monetary policy in Vietnam: alternatives to infl ation targeting 299
Le Anh Tu Packard
Index 315
Contributors
Nelson H. Barbosa-Filho is Professor of Macroeconomics and Public
Finance at the Institute of Economics of the Federal University of Rio de
Janeiro, Brazil and holds a PhD in economics from the New School for
Social Research. Since 2003, Barbosa has been working in President Lula’s
Administration and he is currently the Secretary of Economic Policy at the
Brazilian Ministry of Finance.
Elissa Braunstein is Assistant Professor of Economics at Colorado State
University, Fort Collins, Colorado. She received her PhD in economics
from the University of Massachusetts Amherst and a Master of Pacifi c
International Aff airs from the School of International Relations and
Pacifi c Studies at the University of California San Diego. Prior to joining
CSU, Braunstein was an assistant research professor at the Political
Economy Research Institute (PERI) at the University of Massachusetts
Amherst. Her research focuses on feminist analyses of international eco-
nomics, including the role of foreign direct investment in development.
Recent work involves analysing the impact of foreign investment on gen-
der-based wage inequality in mainland China, the gender-diff erentiated
employment impacts of defl ationary monetary policy in developing coun-
tries, the linkages between trade liberalization and reproductive health
and rights, and the impact of US state tax policy on women’s employment.
Among her recent publications are Trading Women’s Health & Rights?
Trade Liberalization and Reproductive Health in Developing Countries (Zed
Books, 2006, co-edited with Caren Grown and Anju Malhotra).
Jose Antonio Cordero is Professor of Economics at the Escuela de Economia,
Universidad de Costa Rica, San Jose, Costa Rica, and Center for Economic
and Policy Research (CEPR). Portions of his chapter were written during
an academic year as visiting professor at Mount Holyoke College. Cordero
received his PhD from the University of Notre Dame in 1995. His research
focuses on the macroeconomics of growth and distribution in open-mone-
tary economies, and on the eff ects of FDI on economic development.
Gerald Epstein is Professor of Economics and founding Co-Director of
the Political Economy Research Institute (PERI) at the University of
Massachusetts Amherst. His major research and teaching areas are the
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viii Beyond infl ation targeting
political economy of central banking, the political economy of inter-
national fi nance and egalitarian macroeconomic policy reform. He has
published widely in these areas. He has also served as a consultant to
the United Nations Development Programme (UNDP), International
Labor Organization (ILO), United Nations Conference on Trade and
Development (UNCTAD) and is a staff economist with the Center for
Popular Economics (CPE) in Amherst, Massachusetts.
Roberto Frenkel is Principal Research Associate at CEDES (since 1977)
and Professor at the University of Buenos Aires, Argentina (since 1984).
Presently he is also Director of the Graduate Program on Capital Markets,
University of Buenos Aires and teaches graduate courses at the Di Tella
and FLACSO-San Andrés Universities in Argentina and the University
of Pavia in Italy. He is a member of the UNDP Advisors Group, member
of the Board of the World Institute for Development Economic Research
(WIDER), United Nations University and member of the Academic
Council of CEFID-AR. He has published numerous books and articles
in academic journals on macroeconomic theory and policy, money and
fi nance, infl ation and stabilization policies, and labor market and income
distribution, with special focus on Argentina and Latin America.
Luis Miguel Galindo is Professor of Economics at the Faculty of Economics
at the National Autonomous University of Mexico in Mexico City. He
received his PhD in economics from Newcastle University in Newcastle
upon Tyne in the UK. His main research interests are monetary economics
and environmental economics. His recent research is concentrated in the
transmission mechanism of monetary policy in emerging economics and
the economics of climate change. He has worked as an advisor to several
fi nancial institutions and international organizations.
James Heintz, an Associate Research Professor and Associate Director
of the Political Economy Research Institute (PERI at the University
of Massachusetts, Amherst), holds a PhD from the University of
Massachusetts and a Master’s degree from the University of Minnesota.
He has written on a wide range of economic policy issues, including job
creation, global labor standards, egalitarian macroeconomic strategies
and investment behavior. He has worked as an international consultant
on projects in Africa sponsored by the International Labor Organization
(ILO) and the United Nations Development Program (UNDP), that
focus on employment-oriented development policy. From 1996 to 1998
he worked as an economist at the National Labour and Economic
Development Institute in Johannesburg , a policy think tank affi liated with
the South African labor movement.
Contributors ix
Arjun Jayadev is Assistant Professor of Economics at the University of
Massachusetts Boston. He has also been a research fellow at Columbia
University’s Committee on Global Thought. His work focuses on
development and inequality. He received his PhD from the University
of Massachusetts Amherst in 2005.
Raghbendra Jha is Professor of Economics and Executive Director of
the Australia South Asia Research Centre, Arndt-Corden Division of
Economics, Australian National University, Canberra. He obtained his
PhD in economics in 1978 from Columbia University, New York, and
has previously taught at Columbia University and Williams College in
the US, Queen’s University in Canada, the University of Warwick in the
UK, and the Delhi School of Economics and Indira Gandhi Institute of
Development Research in India. His work focuses on macroeconomics
and public economics.
Joseph Anthony Lim is currently a Professor in the Economics Department
of the Ateneo de Manila University, the Philippines. He was also pro-
fessor in economics at the University of the Philippines from 1978 to
2004. He was a Rockefeller scholar and his PhD and Master of Science
graduate degrees were obtained from the University of Pennsylvania and
Massachusetts Institute of Technology, respectively. His fi elds of expertise
are macroeconomics and development economics. His research works
include analyses of the Asian crises, growth analyses and diagnostics of
the Philippine macroeconomy, the debt burden and its adverse impact
on social and economic spending of developing countries, and the gender
aspects of employment generation. He was a macroeconomics, fi nance
and debt advisor to the Bureau for Development Policy (BDP) division of
the United Nations Development Programme (UNDP) New York head-
quarters from 2002 to 2004. He is currently a board member of the Journal
of the Asia Pacifi c Economy published by Francis and Taylor.
Le Anh Tu Packard is Senior Economist at Moody’s Economy.com, a divi-
sion of Moody’s Analytics. She is also a Research Fellow and Convener
of the Research and Study Group on Vietnamese Social and Economic
Reform, Center for Vietnamese Philosophy, Culture and Society, Temple
University, Philadelphia, PA, US, and has spent many years helping the
Vietnamese government on various aspects of economic reform. Her
current research focus is on the international business cycle, trade and
capital fl ows, and fi nancial crises.
Robert Pollin is Professor of Economics and founding Co-Director of the
Political Economy Research Institute at the University of Massachusetts
Amherst. He received a PhD in economics from the New School for Social
Description:This volume, written by an international team of economists, develops concrete, country specific alternatives to inflation targeting, the dominant policy framework of central bank policy that focuses on keeping inflation in the low single digits to the virtual exclusion of other key goals such as em
