Does Inflation Targeting Work in Emerging East-Asian Economies?
AbstractThis paper evaluates on the performance of the inflation-targeting regime in three emerging East-Asian economies that have experienced changes in monetary policy regimes, from rigidities to a flexible exchange rate and inflation targeting, after the financial crisis of 1997-98. In particular, the evaluation focuses on the inter-relationship between inflation and the output growth/gap in these emerging economies between the pre- and post-inflationtargeting periods. A bivariate GARCH (1,1) model is applied. The results reveal lower variability in inflation and output growth after the implementation of the inflation targeting regime. The persistency of inflation and output also decline. The study finds no evidence of greater disinflation cost experienced in these economies after the implementation of the inflation-targeting regime. Overall, the results imply that inflation targeting works well in these emerging markets.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by Savez ekonomista Vojvodine, Novi Sad, Serbia in its journal Panoeconomicus.
Volume (Year): 59 (2012)
Issue (Month): 5 (December)
Contact details of provider:
Web page: http://www.panoeconomicus.rs/
Disinflation cost; Inflation targeting; Macroeconomics; Trade-off; Monetary policy;
Find related papers by JEL classification:
- E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
- N10 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - General, International, or Comparative
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Berument, Hakan & Yuksel, Ebru, 2007.
"Effects of adopting inflation targeting regimes on inflation variability,"
Physica A: Statistical Mechanics and its Applications,
Elsevier, vol. 375(1), pages 265-273.
- Hakan Berument & Ebru Yuksel, 2007. "Effects of Adopting Inflation Targeting Regimes on Inflation Variability," Departmental Working Papers 0702, Bilkent University, Department of Economics.
- Arminio Fraga & Ilan Goldfajn & André Minella, 2003.
"Inflation Targeting in Emerging Market Economies,"
Working Papers Series
76, Central Bank of Brazil, Research Department.
- Jiranyakul, Komain & Opiela, Timothy P., 2010. "Inflation and inflation uncertainty in the ASEAN-5 economies," Journal of Asian Economics, Elsevier, vol. 21(2), pages 105-112, April.
- Ching-Chong Lai & Juin-Jen Chang, 2001. "A Note on Inflation Targeting," The Journal of Economic Education, Taylor & Francis Journals, vol. 32(4), pages 369-380, January.
- Honda, Yuzo, 2000. "Some tests on the effects of inflation targeting in New Zealand, Canada, and the UK," Economics Letters, Elsevier, vol. 66(1), pages 1-6, January.
- Kontonikas, A., 2004.
"Inflation and inflation uncertainty in the United Kingdom, evidence from GARCH modelling,"
Elsevier, vol. 21(3), pages 525-543, May.
- A. Kontonikas, 2002. "Inflation and Inflation Uncertainty in the United Kingdom: Evidence from GARCH modelling," Economics and Finance Discussion Papers 02-28, Economics and Finance Section, School of Social Sciences, Brunel University.
- A. Kontonikas, 2002. "Inflation and Inflation Uncertainty in the United Kingdom: Evidence from GARCH modelling," Public Policy Discussion Papers 02-28, Economics and Finance Section, School of Social Sciences, Brunel University.
- Engle, Robert F. & Kroner, Kenneth F., 1995. "Multivariate Simultaneous Generalized ARCH," Econometric Theory, Cambridge University Press, vol. 11(01), pages 122-150, February.
- Carlos Capistrán & Manuel Ramos Francia, 2007.
"Does Inflation Targeting Affect the Dispersion of Inflation Expectations?,"
2007-11, Banco de México.
- Carlos Capistrán & Manuel Ramos-Francia, 2010. "Does Inflation Targeting Affect the Dispersion of Inflation Expectations?," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 42(1), pages 113-134, 02.
- Stephen Cecchetti & Michael Ehrmann, 2000.
"Does Inflation Targeting Increase Output volatility? An International Comparison of Policy Maker's Preferences and Outcomes,"
Working Papers Central Bank of Chile
69, Central Bank of Chile.
- Stephen G. Cecchetti & Michael Ehrmann, 2002. "Does Inflation Targeting Increase Output Volatility?: An International Comparison of Policymakers' Preferences and Outcomes," Central Banking, Analysis, and Economic Policies Book Series, in: Norman Loayza & Klaus Schmidt-Hebbel & Norman Loayza (Series Editor) & Klaus Schmidt-Hebbel (Series (ed.), Monetary Policy: Rules and Transmission Mechanisms, edition 1, volume 4, chapter 9, pages 247-274 Central Bank of Chile.
- Stephen G. Cecchetti & Michael Ehrmann, 1999. "Does Inflation Targeting Increase Output Volatility? An International Comparison of Policymakers' Preferences and Outcomes," NBER Working Papers 7426, National Bureau of Economic Research, Inc.
- J. H. Green, 1996. "Inflation Targeting," IMF Working Papers 96/65, International Monetary Fund.
- Frederic S. Mishkin & Adam S. Posen, 1998.
"Inflation Targeting: Lessons from Four Countries,"
NBER Working Papers
6126, National Bureau of Economic Research, Inc.
- Chan Huh, 1996. "Some evidence on the efficacy of the UK inflation targeting regime: an out-of-sample forecast approach," International Finance Discussion Papers 565, Board of Governors of the Federal Reserve System (U.S.).
- Carlos Eduardo S. Gonçalves & Alexandre Carvalho, 2009. "Inflation Targeting Matters: Evidence from OECD Economies' Sacrifice Ratios," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 41(1), pages 233-243, 02.
- Takashi Senda & Julie K Smith, 2008. "Inflation History And The Sacrifice Ratio: Episode-Specific Evidence," Contemporary Economic Policy, Western Economic Association International, vol. 26(3), pages 409-419, 07.
- Arestis, Philip & Caporale, Guglielmo Maria & Cipollini, Andrea, 2002. "Does Inflation Targeting Affect the Trade-Off between Output Gap and Inflation Variability?," Manchester School, University of Manchester, vol. 70(4), pages 528-45, Special I.
- John H. Green, 1996. "Inflation Targeting: Theory and Policy Implications," IMF Staff Papers, Palgrave Macmillan, vol. 43(4), pages 779-795, December.
- Ferya Kadioglu & Nilufer Ozdemir & Gokhan Yilmaz, 2000. "Inflation Targeting in Developing Countries," Discussion Papers 0006, Research and Monetary Policy Department, Central Bank of the Republic of Turkey.
- Kosta Josifidis & Emilija Beker Pucar & SlaÄ‘ana SrdiÄ‡ & Gabriela Ivan, 2014. "Inflation Targeting in Advanced vs. Emerging Economies before and after the Crisis," Panoeconomicus, Savez ekonomista Vojvodine, Novi Sad, Serbia, vol. 61(1), pages 79-106, Februar.
- Nicholas Apergis, 2013. "The Stylized Facts of Greek Inflation: New Evidence on Persistence," Panoeconomicus, Savez ekonomista Vojvodine, Novi Sad, Serbia, vol. 60(1), pages 51-71, March.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ivana Horvat) The email address of this maintainer does not seem to be valid anymore. Please ask Ivana Horvat to update the entry or send us the correct address.
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.