Re-evaluating the effectiveness of inflation targeting
Document Type
Article
Publication Date
5-2018
Publication Title
Journal of Economic Dynamics and Control
DOI
10.1016/j.jedc.2018.01.045
ISSN
0165-1889
Abstract
This paper estimates the treatment effect of inflation targeting on macroeconomic variables using a semiparametric single index method by taking into account the model misspecification of parametric propensity scores. Our study uses a broader set of preconditions for inflation targeting and macroeconomic outcome variables than the existing literature. The results suggest no significant difference in the inflation level and inflation volatility between targeters and non-targeters after the adoption of inflation targeting. We find that inflation targeting reduces sacrifice ratio and interest rate volatility in the developed economies, and that it enhances fiscal discipline in both the industrial and developing countries.
Recommended Citation
Ardakani, Omid, N. Kundan Kishor, Suyong Song.
2018.
"Re-evaluating the effectiveness of inflation targeting."
Journal of Economic Dynamics and Control, 90: 76-97: Elsevier.
doi: 10.1016/j.jedc.2018.01.045 source: 10.1016/j.jedc.2018.01.045
https://digitalcommons.georgiasouthern.edu/economics-facpubs/125
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