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Latin American inflation differentials with USA inflation: does Inflation Targeting make a difference?

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  • Carlos A. Carrasco
  • Jesus Ferreiro

Abstract

The objective of the paper is to analyse whether the use of Inflation Targeting (IT) has had an impact on the process of convergence of inflation rates between Latin American countries and the United States. The analysis is made using non-habitual convergence tests. Some implications arise from our analysis. First, IT countries have lower inflation than countries with different monetary strategies. Second, the disinflationary process has been widespread, taking place in Latin America later than in developed countries. Finally, countries with other monetary policy strategies have also reduced the levels and dispersion of their inflation rates.

Suggested Citation

  • Carlos A. Carrasco & Jesus Ferreiro, 2014. "Latin American inflation differentials with USA inflation: does Inflation Targeting make a difference?," Journal of Economic Policy Reform, Taylor & Francis Journals, vol. 17(1), pages 13-32, March.
  • Handle: RePEc:taf:jpolrf:v:17:y:2014:i:1:p:13-32
    DOI: 10.1080/17487870.2013.787794
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    References listed on IDEAS

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    Cited by:

    1. Eric Girardin & Cheikh A. T. Sall, 2018. "Inflation Dynamics of Franc-Zone Countries Determinants, Co-movements and Spatial Interactions," Open Economies Review, Springer, vol. 29(2), pages 295-320, April.
    2. Bruno Ferreira Frascaroli & Wellington Charles Lacerda Nobrega, 2019. "Inflation Targeting and Inflation Risk in Latin America," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 55(11), pages 2389-2408, September.

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