Does Institutional Change Really Matter? Inflation Targets, Central Bank Reform and Interest Rate Policy in the OECD Countries

Vito Muscatelli, Patrizio Tirelli and Carmine Trecoci
Authors registered in the RePEc Author Service: Carmine Trecroci

Manchester School, 2002, vol. 70, issue 4, 487-527

Abstract: We estimate forward–looking interest rate reaction functions for the G3 and some inflation targeters. Shifts in the conduct of monetary policy are detected for the USA and Japan. In contrast with the existing literature, we show that these countries only shifted to policies consistent with an implicit inflation–targeting regime in the 1990s. Inflation targets and central bank reforms in Sweden, the UK, Canada and New Zealand only led in some cases to changes in policy responses, and changes in policy pre–date the introduction of targets. We challenge the one–model–fits–all approach towards monetary policy that permeates much of the current literature.

Date: 2002
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https://doi.org/10.1111/1467-9957.00298

Related works:
Working Paper: Does Institutional Change Really Matter? Inflation Targets, Central Bank Reform and Interest Rate Policy in the OECD Countries (2000)
Working Paper: DOES INSTITUTIONAL CHANGE REALLY MATTER? INFLATION TARGETS, CENTRAL BANK REFORM AND INTEREST RATE POLICY IN THE OECD COUNTRIES (1999)
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