European Parliament Library

Inflation Targeting in Georgia :, Are We There Yet?, Giorgi Bakradze, Andreas Billmeier

This paper evaluates whether Georgia is ready to adopt inflation targeting (IT), a monetary policy framework that several emerging markets have adopted recently. After reviewing selected prerequisites for successfully implementing IT, the paper focuses on whether one specific precondition is in place-an empirically stable monetary transmission mechanism. Building on a baseline VAR model, it presents several extensions to explore the various channels using causality tests, impulse responses, and variance decompositions. The paper finds that once the central bank overcomes some institutional and operational weaknesses and establishes a more reliable transmission mechanism, it could adopt IT over the medium term
Table Of Contents
Contents; I. Introduction; II. Background: Monetary Policymaking in Georgia Since 1995; III. Selected Elements of IT in Georgia; A. Central Bank Independence, Transparency, and Accountability; B. Definition of the Target; Tables; 1. Monetary Policy Targets and Outcomes, 2001-07; C. Modeling the Georgian Economy; A macroeconomic model of the economy; The NBG's inflation forecasting model; 2. NBG Efforts Regarding the Forecasting and Modeling of the Georgian Economy; The monetary transmission mechanism in Georgia; Figures; 1. Inflation Forecasting Fan Chart, 2005-07; IV. Empirical Analysis
Literary Form
non fiction
Description based upon print version of record
Physical Description
1 online resource (35 p.)
Specific Material Designation
Form Of Item

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