Does the exchange rate regime make a difference in inflation performance in developing and emerging countries?: The role of inflation targeting

Hiroyuki Yamada

Journal of International Money and Finance, 2013, vol. 32, issue C, 968-989

Abstract: We apply propensity score matching estimators with multiple outcomes to evaluate the impacts of exchange rate regimes (fixed, intermediate, and flexible without inflation targeting) and inflation targeting on inflation rates in emerging and developing countries. An inflation-targeting regime does better than or at least as good work as a fixed regime in lowering inflation rates when compared with intermediate or flexible regimes. We do not observe a clear difference in inflation rates between fixed and inflation-targeting regimes in recent years (2000–2007). Intermediate and flexible regimes provide higher inflation than fixed or inflation-targeting regimes in most cases.

Keywords: Inflation; Exchange rate regime; Inflation targeting (search for similar items in EconPapers)
JEL-codes: E31 E5 F31 O24 (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (28)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jimfin:v:32:y:2013:i:c:p:968-989

DOI: 10.1016/j.jimonfin.2012.08.003

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