Does Inflation Targeting Matter?
Electronic Access:
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Summary:
This paper asks whether inflation targeting improves economic performance, as measured by the behavior of inflation, output, and interest rates. We compare 7 OECD countries that adopted inflation targeting in the early 1990s to 13 that did not. After the early 1990s, performance improved along many dimensions for both targeting and nontargeting countries. In some cases, the targeters improved by more. However, these differences are explained by the fact that targeters performed worse than nontargeters before the early 1990s, and there is regression towards the mean. Once one controls for this, there is no evidence that inflation targeting improves performance.
Series:
Working Paper No. 2003/129
Subject:
Corporate income tax Financial services Inflation Inflation targeting Monetary policy Prices Production Production growth Short term interest rates Taxes
English
Publication Date:
June 1, 2003
ISBN/ISSN:
9781451855135/1018-5941
Stock No:
WPIEA1292003
Pages:
36
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