Inflation targeting and inflation convergence: International evidence

Philip Arestis, Georgios Chortareas, Georgios Magkonis and Demetrios Moschos

Journal of International Financial Markets, Institutions and Money, 2014, vol. 31, issue C, 285-295

Abstract: We examine whether the inflation rates of the countries that pursue inflation targeting policies have converged as opposed to the experience of the OECD non-inflation targeters. Using a methodology introduced by Pesaran (2007a), we examine the stationarity properties of the inflation differentials. This approach has the advantage of avoiding setting arbitrarily a specific country as the benchmark economy. Our results indicate that the inflation rates converge irrespective of the monetary policy framework.

Keywords: Inflation targeting; Inflation convergence; Pair-wise approach; Unit roots (search for similar items in EconPapers)
JEL-codes: C22 E31 (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (25)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:intfin:v:31:y:2014:i:c:p:285-295

DOI: 10.1016/j.intfin.2014.04.002

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