The transition to inflation targeting in Romania

Central Banking staff
06 Jan 2005

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In the near future, Romania will introduce inflation targeting and fully liberalize its capital account. This recently published IMF Working Paper analyses how these two profound changes will affect the ability of monetary policy to pursue its objective of price stability.

In particular, the resilience of the current and future monetary policy regimes to shocks is evaluated against two welfare criteria: a standard central bank loss function containing the deviations of inflation, output, and

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