Inflation Targeting and Policy Rules

"""Oscar Rodriguez Medina and Dr. Elias Alvarado Lagunas are well-documented and expert professors in monetary theory. In their book, Inflation Targeting and Policy Rules: The Case of Mexico, 2001–2012, they begin with a serious and a rigorous theoretical analysis and then offer empirical evidence, emphasizing the case of emerging countries and how this kind of countries is most vulnerable to global issues as financial crises. Also the book explains how governments have implemented the inflation targeting approach and use monetary policy rules as a regulatory policy and price stabilization. I would recommend publication."" —Dr. Mario Sánchez Silva, Director, National Polytechnic Institute, Mexico ""The relevance of this book is based on that it is a theoretical-practical guide in the way in which, nowadays, the majority of the world’s central banks manage their monetary policy. The design of this book, even though it requires knowledge of technical terms, is easy to read because it was written carefully in detail. It emphasizes the case of developing countries whose transition to the use of the scheme of inflation targets and monetary policy rules is recent or in process, without neglecting the review of the exchange rate variable in monetary policy decision-making. . . . The authors describe the efforts of countries, such as Mexico, to use the interest rate as a nominal anchor of the economy. However, the recent international economic circumstances, such as the decrease in petroleum prices, and the impact on public finances have caused the Banco de Mèxico to change its objective for the interbank interest rate, which is an evidence that it is possible that the volatility of the exchange rate negatively influence inflation expectations. It has been a pleasure to review this work, and I recommend the utilization of this guide for advanced macroeconomics courses, both at undergraduate and graduate levels, because it represents an interesting empirical and theoretical reference frame of the monetary policy conduct in our country."" —Mario César Davila Aguirre, PhD, Coordinator of the Business Incubator and Social Entrepreneurship Program, Autonomous University of New Leon, Mexico ""From the three pillars of contemporary monetary economics: 1) hypothesis of rational expectations, 2) policy rules, and 3) inflation targeting framework. The authors Oscar Rodríguez and Elias Alvarado expose with a clear and simple analytical vision how the Mexican Bank Central has conducted its monetary policy in the last years specially before and after of subprime crisis. Therefore, this book should be required reading to understand the process of design and implementation of a monetary policy with the aim of a low and stable inflation to ensure the growth of the Mexican economy."" —Javier Galán Figueroa, PhD, Graduate School of Economics, Faculty of Economy, National Autonomous University of Mexico (UNAM)"