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Inflation Targeting in Brazil, Chile and South Africa: An Empirical Investigation of Their Monetary Policy Framework

Author

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  • Mona Kamal

Abstract

This paper tackles the monetary policy performance in Brazil, Chile and South Africa under inflation targeting framework. Furthermore, it provides an empirical assessment through using the unrestricted Vector Auto-regression (VAR) and Structural Vector Auto-regression (SVAR) approaches depending on data spans the period from the first quarter of 1970 to the fourth quarter of 2007. On the other hand, it utilizes the Likelihood Ratio (LR) Statistic to test for possible structural changes due to the adoption of inflation targeting regime in those countries. The main findings are as follows: inflation targeting does make a difference in the performance of monetary policy in those countries. Furthermore, the experience of Brazil, Chile and South Africa provides important lessons for other emerging market economies to adopt such a framework.

Suggested Citation

  • Mona Kamal, 2010. "Inflation Targeting in Brazil, Chile and South Africa: An Empirical Investigation of Their Monetary Policy Framework," William Davidson Institute Working Papers Series wp1004, William Davidson Institute at the University of Michigan.
    • Handle: RePEc:wdi:papers:2010-1004
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    File URL: http://deepblue.lib.umich.edu/bitstream/2027.42/133018/1/wp1004.pdf
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    Citations

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    Cited by:

    1. Christian Glocker & Pascal Towbin, 2012. "The Macroeconomic Effects of Reserve Requirements," WIFO Working Papers 420, WIFO.
    2. Meyer Danie Francois & Chipeta Chama & Camel Richard Thabang Mc, 2018. "An Analysis of the Effectiveness of Interest Rates to Facilitate Price Stability and Economic Growth in South Africa," Studia Universitatis Babeș-Bolyai Oeconomica, Sciendo, vol. 63(3), pages 68-90, December.
    3. Bareith, Tibor & Varga, József, 2022. "Az inflációs célt követő rendszer hozzájárulása az infláció mérsékléséhez Magyarországon [The contribution of the inflation targeting system to reducing inflation in Hungary]," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(9), pages 989-1008.

    More about this item

    Keywords

    Monetary policy; Vector Auto-regression (VAR); Structural Vector Auto-regression (SVAR) approach; Inflation Targeting Framework.;
    All these keywords.

    JEL classification:

    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies

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