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Comparative case studies of the effects of inflation targeting in emerging economies


  • Wang-Sheng Lee


This paper examines the question of whether inflation targeting is an effective policy tool in emerging economies using a novel non-experimental evaluation approach. In particular, we adopt synthetic control methods to assess the effect that inflation targeting has had on each emerging economy that adopted such policies in the 1990s and 2000s. The evidence suggests that inflation targeting helped Colombia, the Czech Republic, Hungary and Poland reduce their inflation rates. Although Chile is often regarded as a poster child for inflation targeting policies in emerging economies, no significant reductions in inflation levels were found when a later policy start date some analysts believe to be more reflective of the true policy adoption date was used. Copyright 2011 Oxford University Press 2010 All rights reserved, Oxford University Press.

Suggested Citation

  • Wang-Sheng Lee, 2011. "Comparative case studies of the effects of inflation targeting in emerging economies," Oxford Economic Papers, Oxford University Press, vol. 63(2), pages 375-397, April.
  • Handle: RePEc:oup:oxecpp:v:63:y:2011:i:2:p:375-397

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    References listed on IDEAS

    1. King, Mervyn A & Wadhwani, Sushil, 1990. "Transmission of Volatility between Stock Markets," Review of Financial Studies, Society for Financial Studies, vol. 3(1), pages 5-33.
    2. Shiller, Robert J. & Beltratti, Andrea E., 1992. "Stock prices and bond yields : Can their comovements be explained in terms of present value models?," Journal of Monetary Economics, Elsevier, vol. 30(1), pages 25-46, October.
    3. Robert J. Shiller, 1989. "Comovements in Stock Prices and Comovements in Dividends," Journal of Finance, American Finance Association, vol. 44(3), pages 719-730, July.
    4. Robert S. Pindyck & Julio J. Rotemberg, 1990. "Do Stock Prices Move Together Too Much?," NBER Working Papers 3324, National Bureau of Economic Research, Inc.
    5. King, Mervyn & Sentana, Enrique & Wadhwani, Sushil, 1994. "Volatility and Links between National Stock Markets," Econometrica, Econometric Society, vol. 62(4), pages 901-933, July.
    6. Pindyck, Robert S & Rotemberg, Julio J, 1990. "The Excess Co-movement of Commodity Prices," Economic Journal, Royal Economic Society, vol. 100(403), pages 1173-1189, December.
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    Cited by:

    1. Swarnali Ahmed Hannan, 2016. "The Impact of Trade Agreements; New Approach, New Insights," IMF Working Papers 16/117, International Monetary Fund.
    2. repec:bla:jcmkts:v:55:y:2017:i:3:p:419-431 is not listed on IDEAS
    3. repec:eee:reveco:v:51:y:2017:i:c:p:405-416 is not listed on IDEAS
    4. Singhal, Saurabh & Nilakantan, Rahul, 2016. "The economic effects of a counterinsurgency policy in India: A synthetic control analysis," European Journal of Political Economy, Elsevier, vol. 45(C), pages 1-17.
    5. Pei-Chien Lin & Ming-Feng Hung, 2016. "The Effect of Energy Service Companies on Energy Use in Selected Developing Countries: A Synthetic Control Approach," International Journal of Energy Economics and Policy, Econjournals, vol. 6(2), pages 335-348.
    6. Mircea Trandafir, 2014. "The Effect of Same-Sex Marriage Laws on Different-Sex Marriage: Evidence From the Netherlands," Demography, Springer;Population Association of America (PAA), vol. 51(1), pages 317-340, February.
    7. Ismailov, Shakhzod & Kakinaka, Makoto & Miyamoto, Hiroaki, 2016. "Choice of inflation targeting: Some international evidence," The North American Journal of Economics and Finance, Elsevier, vol. 36(C), pages 350-369.
    8. repec:gam:jsusta:v:9:y:2017:i:6:p:944-:d:100445 is not listed on IDEAS

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