Towards inflation Targeting Approach in Ethiopia

Lately, the Ethiopian government claimed that the economy experienced a higher economic growth, which coincides with the persistent inflationary trend. Possibly, if the inflationary pressure intensifies further, the prospected long run economic growth will be jeopardized. The government took some measures to subdue the inflationary surge including price freeze, and some policy measures, but unable to find the right signal still now. The continuous unsuccessful price control attempts of the government may creates uncertainty about the future price, which itself worsen things further. Based on this ground, this work attempted to search for a better inflation controlling mechanism, which has a long run objective. Nowadays, many nations able to subdue inflation successfully without harming economic growth through inflation targeting mechanism. Hence, this book attempted to assess the possibility of implementing inflation targeting framework of monetary policy in Ethiopia, which has a promising result as observed from the experience of inflation targeter countries.