References Albagli, E. and K. Schmidt-Hebbel (2004), “By How Much and Why do Inflation Targeters Miss Their Targets?”, Mimeo, Central Bank of Chile. Céspedes, L. and C. Soto (2005), “Credibility and Inflation Targeting in an Emerging Market: Lessons from the Chilean Experience”, International Finance 8 (3): 545-75. Gürkaynak R., A. Levin, A. Marder and E. Swanson (2007), “Inflation Targeting and the Anchoring of Inflation Expectations in the Western Hemisphere,” in Monetary Policy Under Inflation Targeting,  BIS Review 68/2007  5  Series on Central Banking, Analysis, and Economic Policies Vol. XI, edited by K. Schmidt-Hebbel and F. Mishkin, Central Bank of Chile. Institute for Management Development (2006), World Competitiveness Yearbook, several years. International Monetary Fund (2007), International Financial Statistics. Data on CD-ROM, April. Mishkin, Frederic S. and K. Schmidt-Hebbel (2007), “Does Inflation Targeting Make a Difference?” in Monetary Policy Under Inflation Targeting, Series on Central Banking, Analysis, and Economic Policies Vol. XI, edited by K. Schmidt-Hebbel and F. Mishkin, Central Bank of Chile. Moody’s Investors Service (2006), “Monthly Ratings List. Bank Credit Research”. Ramos-Francia, M., D. Chiquiar, and A. Noriega (2007), “A Time Series Approach to Test a Change in Inflation Persistence: The Mexican Experience”, Working Paper N° 2007-01, Banco de México. World Bank (2007), World Development Indicators 2007. April.
In particular, the very favorable world economic conditions that have resulted in important terms of trade gains have been associated this time to fiscal prudence, complementing monetary and exchange-rate policies aimed at achieving and maintaining price stability. Four areas of macroeconomic adjustment: Fiscal, monetary and exchange rate policies, and the financial system The main changes that have taken place are in four key areas: (i) adoption of sustainable and responsible fiscal policies, reflected in declining fiscal deficits in most emerging economies (figure 1); (ii) adoption of floating regimes or hard pegs, moving away from intermediate exchange-rate (ER) regimes; (iii) shift of monetary policy (MP) anchors from ERs or monetary aggregates to an inflationtargeting (IT) anchor, particularly in Latin America; and (iv) these changes have been accompanied by the strengthening of regulation and supervision of financial systems, supporting strong financial development. Shift toward more flexible ER regimes The world shift toward more flexible ER regimes has been pronounced. The evidence shows a significant shift away from intermediate regimes. In 1990, nearly 70% of all countries were pursuing some variant of intermediate ER regimes, a share that dropped to 41% by the end of the 1990s, and further to 30% in 2004 (figure 2)1. Exits from intermediate regimes were more frequently towards floats rather than to hard pegs. The share of floaters increased from 15% in 1990 to 45% in 2004 while, on the other extreme, the share of hard pegs rose from 15% to 26% during the same time span.