CONSTRUCCION POLMON

1. Effect of Inflation Targeting on Emerging Markets Economies 1 Leonardo Leiderman 17 October 2002

7. Israel: High Inflation Preceded Gradual Inflation Convergence Under IT 7

8. Mexico’s Disinflation 8

9. Inflation and Inflation Targets in Chile ( a) 9 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0% 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 Source: Landerretche , Morande , and Schmidt- Hebbel (1998). ( a) Target is set in September for the following calendar year

10. Israel….. 10

11. THE EXCHANGE RATE OF THE NIS VIS-A-VIS THE CURRENCY BASKET 11

12. Israel's budget deficit - % of GDP 12

13. Monetary Policy Reaction to Expected- Inflation Scares: The Case of Israel 13

14. Real ex-ante Bank of Israel interest rate the nominal rate less market based inflation expectations for the next 12 months 14

15. The Bottom Line: Current Nominal and Real Interest Rates 15

16. Fiscal Discipline is Crucial: The Case of Brazil Net public debt (% of GDP) PSBR (% GDP) 16

18. Effect of Inflation Targeting on Emerging Markets Economies 18 Leonardo Leiderman 17 October 2002