On the International Effects of Inflation Targeting
AbstractThis study empirically examines the international effects of inflation targeting. Employing a variety of propensity score matching methods, we find strong evidence that inflation targeting has significantly different impacts on exchange rate volatility and international reserves in different country groups. It significantly increases real and nominal exchange rate stability and international reserves in developing countries but lowers them in industrial countries. On average, inflation targeting increases (lowers) reserves roughly by the size of 1.3 (1.8) months of imports values in developing (industrial) countries. The treatment effects on targeting countries' current accounts are found to be insignificant in both country groups. © 2010 The President and Fellows of Harvard College and the Massachusetts Institute of Technology.
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Bibliographic InfoArticle provided by MIT Press in its journal The Review of Economics and Statistics.
Volume (Year): 92 (2010)
Issue (Month): 1 (February)
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- Armand Fouejieu Azangue, 2012. "Coping with the Recent Financial Crisis, did Inflation Targeting Make Any Difference?," Working Papers, HAL halshs-00826277, HAL.
- Minea, Alexandru & Tapsoba, René, 2014. "Does inflation targeting improve fiscal discipline?," Journal of International Money and Finance, Elsevier, Elsevier, vol. 40(C), pages 185-203.
- Stefan Gerlach & Peter Tillmann, 2011.
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- Gerlach, Stefan & Tillmann, Peter, 2012. "Inflation targeting and inflation persistence in Asia–Pacific," Journal of Asian Economics, Elsevier, Elsevier, vol. 23(4), pages 360-373.
- Christian Mumssen & Yasemin Bal-Gunduz & Christian Ebeke & Linda Kaltani, 2013. "IMF-Supported Programs in Low Income Countries: Economic Impact over the Short and Longer Term," IMF Working Papers, International Monetary Fund 13/273, International Monetary Fund.
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