that does not mean that there is a particular formula or set of institutional arrangements that can readily be picked up and transplanted. no doubt, the bank of thailand is bringing its own perspectives to these issues, and adapting the experience and practice of others to find structures that best suit local conditions. i wish them well in that endeavour. references bernanke, ben s ; laubach, thomas ; mishkin, frederick s ; posen, adam s 1999. “ inflation targeting. lessons from the international experience ”. princeton university press. brash, donald. 1999. “ inflation targeting : an alternative way of achieving price stability ”. a speech delivered on the occasion of the 50th anniversary of central banking in the philippines. reserve bank of new zealand bulletin, vol 62 no 1. king, mervyn. 1999. “ the mpc two years on ”, lecture delivered to queen ’ s university, belfast. reddell, michael. 1999. “ origins and early development of the inflation target ”. reserve bank of new zealand bulletin, vol 62 no 3. sherwin, murray. 1999. “ inflation targeting : 10 years on ”. paper delivered to the new zealand association of economists conference in rotorua. reserve bank of new zealand bulletin, vol 62 no 3. sherwin, murray, 1999. “ strategic choices in inflation targeting : the new zealand experience ”. paper delivered to an imf and central bank of brazil seminar on inflation targeting. stevens, glenn. 1999. “ six years of inflation targeting ”. address to economic society of australia. svensson, lars e o 1997. “ inflation forecast targeting : implementing and monitoring inflation targets ”. european economic review, vol 41.

. so too are other inflation targeting central banks. context these are awkward times for small, open economies as they struggle to find monetary and financial structures that will facilitate growth, prosperity and stability in a world characterised by increasing openness to trade and capital flows and, it seems, increasing volatility. the events of 1997 and 1998 demonstrated how rapidly stresses in one economy can be transmitted to others. they also underlined just how important are strong institutions, strong balance sheets - in both the public and the private sector - and strong risk management practices to ensuring robustness in the face of shocks. dr grenville, our next speaker, will deal with the issues of inflation targeting in a world of volatile capital flows. i see that as a key component of our discussions today because we know that we have to be able to devise structures that enable us to live in such a world. the evolution towards more open capital accounts and greater capital mobility is being driven largely by technological developments. those new technologies bring us all enormous advantages and are fuelling extraordinary growth internationally. the challenge we all face is how to gain the advantages of the new technologies without being swamped by their other consequences - such as the enhanced mobility of capital, of goods, ideas, skills, people and resources generally. amongst other things, this requires us to find institutional and policy structures that enable us to take advantage of the new technologies while acquiring the flexibility to adapt rapidly and without undue stress to new developments and shocks. the institutional structure employed for the conduct of monetary policy is just one of the factors that policymakers need consider in thinking about these issues. trade policy, prudential regulation, accounting and audit standards, legal structures and bankruptcy provisions - amongst other elements of policy - are all very important and should not be overlooked in the design of robust institutional frameworks. but today we are here to consider just monetary policy. what is inflation targeting? first, a couple of definitional points to help locate the discussion we will be engaging in over the rest of the day. what is inflation targeting? a substantial study of inflation targeting was published in 1999 by ben bernanke, thomas laubach, rick mishkin and adam posen. 1 in their book, they described it in the following way : “ inflation targeting is a framework for monetary policy characterised by the public announcement of official quantitative targets ( or target ranges ) for the inflation rate over one or more time horizons, and by explicit acknowledgement that low, stable inflation is