F15, F33, R11,

This paper considers the distributional dynamics of a well‐known corruption index. Specifically, we are interested in evaluating whether corruption is best characterized as multimodal (i.e. pointing to clusters of countries with persistently different levels of corruption) and whether there have been significant changes (i.e. convergence or divergence) in the distribution of the perception of corruption across countries and over time. Using non‐parametric kernel density methods, our findings lend support to concerns expressed in the theoretical literature – namely, that corruption can be highly persistent, and characterized by multiple equilibria. This highlights and corroborates the conclusion that anti‐corruption campaigns must be sustained to be effective.

Inflation targeting has been widely adopted in Latin America. In this paper, we show evidence consistent with major beneficial effects from so doing, with falling term premia and anchored policy rate expectations. To do this we construct term premia estimates using the method suggested by Adrian et al. (2013) for selected inflation targeting Latin American economies. They use synthetic prices constructed from estimated yield curves to derive holding-period excess returns and condition on the principal components of the yields. This approach is extremely easy to implement and fast to calculate. We detect a small drop in interest rate expectations since the global financial crisis but longer term rates seem remarkably well anchored. There is also relatively low correlation between our estimated Latin American and US term premia.

No abstract

This section discusses monetary policy, covering the basic theories and concepts of monetary policy, monetary policy frameworks, and the evolution of monetary policy from the period before the 1997/98 Asian financial crisis to the period after the 2008/09 global financial crisis (GFC). The ITF can, on the whole, still be relied on as a monetary policy strategy. However, due to a background of problems, especially those that emerged after the 2008/09 global financial crisis, various central banks need to strengthen their monetary policy framework through the application of a non-strict framework, or flexible ITF, with efforts to jointly stabilize inflation and the real economy in the short term.