01727cas a2200241 a 4500 AALejournalIMF003550 230101c9999 xx r poo 0 0eng d 5.00 USD 9781451861082 1018-5941 BD-DhAAL BD-DhAAL International Monetary Fund. Inflation Targeting and Output Growth : Empirical Evidence for the European Union. Washington, D.C. : International Monetary Fund, 2005. 1 online resource (27 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students This paper evaluates the performance of two alternative policy rules, a forward-looking rule and a spontaneous adjustment rule, under alternative inflation targets, in terms of output losses in a macroeconomic model, using European Union data. The simulations suggest that forward-looking rules contribute to macroeconomic stability and monetary policy credibility, and that a positive inflation target, as opposed to zero inflation, leads to higher and less volatile output. These results are robust to changes in the specification of the model and time period. The same methodology applied to individual countries supports country-specific flexible inflation targeting. Mode of access: Internet IMF Working Papers; Working Paper ; No. 2005/089 Full text available on IMF http://elibrary.imf.org/view/journals/001/2005/089/001.2005.issue-089-en.xml IMF e-Library