Latin America System

31.10.17 / News / Author:

Sics (2002, P. 24) Another factor important for the adoption of the inflation goals, it would be the increase of accountability of the Central banking, diminishing its possibility to fall in the ambush of the secular inconsistency. Moreover, the increase of accountability becomes possible to foresee the expectations of the inflation. Svensson (1998) identified three phases of a delegation of efficient monetary politics, is they: (1) society announces goals for the monetary politics, (2) the central banking receives instrument from independence to follow the goals, (3) the central banking is responsible before the society for the fulfilment of the goals for the monetary politics. 2.3.2 Disadvantages For Mishkin and Savastano (2001), the inflation is considered an 0 variable of difficult control, this would be the first disadvantage of the adoption of the system of inflation goals. This problem is considered still bigger for the countries of Latin America, therefore they are characterized by possessing raised inflation levels. In function of this, these countries finish generating little credibility to the market, for the fact of, with some frequency the goals are deviated and to occur errors in the forecast how much to the future inflation. According to Sics (2002), the theory that supports the regimen of inflationary goals is not consensual between the economists and, its hypotheses do not possess evidences capable to support them.

For times, such hypotheses not even possess internal consistency. Ademais, argues that if the only objective of the monetary politics is the control of the inflation, it this being subutilizada. The system of inflation goals possesss rigid rules very. As Mishkin and Savastano (2001), this finishes diminishing flexibility to deal with unexpected circumstances. On the other hand, it was commented in the item of the advantages, that the system of inflation goals adapte easily, in the cases of shock of domestic or external origin, what also it can be faced as a fragility of the system, therefore finishes not serving as nominal anchor for not allowing much flexibility.

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