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Inflation targeting and inflation convergence: International evidence

Listed author(s):
  • Arestis, Philip
  • Chortareas, Georgios
  • Magkonis, Georgios
  • Moschos, Demetrios

We examine whether the inflation rates of the countries that pursue inflation targeting policies have converged as opposed to the experience of the OECD non-inflation targeters. Using a methodology introduced by Pesaran (2007a), we examine the stationarity properties of the inflation differentials. This approach has the advantage of avoiding setting arbitrarily a specific country as the benchmark economy. Our results indicate that the inflation rates converge irrespective of the monetary policy framework.

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File URL: http://www.sciencedirect.com/science/article/pii/S104244311400050X
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Article provided by Elsevier in its journal Journal of International Financial Markets, Institutions and Money.

Volume (Year): 31 (2014)
Issue (Month): C ()
Pages: 285-295

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Handle: RePEc:eee:intfin:v:31:y:2014:i:c:p:285-295
DOI: 10.1016/j.intfin.2014.04.002
Contact details of provider: Web page: http://www.elsevier.com/locate/intfin

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