The Lag in Effect of Inflation Targeting and Policy Evaluation

WenShwo Fang and Stephen Miller

No 2010-01, Working papers from University of Connecticut, Department of Economics

Abstract: The lag in effect of monetary policy contains vital information for the policy evaluation. Allowing for a time-varying treatment effect, we show that inflation targeting effectively lowers inflation for both developed and developing countries. Developed countries reach their targets rapidly with a two-year lag in effect. Developing countries, however, reduce inflation gradually toward their targets and do not reach their ultimate goal by the end year of 2007.

Keywords: time lag; inflation targeting; time-varying treatment effect; policy evaluation (search for similar items in EconPapers)
JEL-codes: C52 E31 E52 (search for similar items in EconPapers)
Date: 2010-01
New Economics Papers: this item is included in nep-cba, nep-mac and nep-mon
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Citations: View citations in EconPapers (1)

Published in Applied Economic Letters, 18(14) 2011

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Journal Article: The lag in effect of inflation targeting and policy evaluation (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:uct:uconnp:2010-01

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