Inflation Targeting in Colombia, 2002–12

Abstract

Inflation Targeting in Colombia, 2002-12 O ver the last twenty years, nearly thirty countries have adopted inflationtargeting regimes to conduct monetary policy. In addition to the announcement of specific inflation targets, inflation-targeting regimes have been characterized by increased transparency, enhanced communication with the public, and explicit accountability mechanisms. Moreover, their policy strategy is based on setting short-run interest rates rather than on targeting monetary aggregates. In principle, inflation-targeting regimes also increase exchange rate flexibility.