The Impact of Monetary Strategies on Inflation Persistence

Evžen Kočenda and Balázs Varga
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Balázs Varga: OTP Fund Management and Corvinus University of Budapest

International Journal of Central Banking, 2018, vol. 14, issue 4, 229-274

Abstract: We analyze the impact of price-stability-oriented monetary strategies on inflation persistence by using a time-varying coefficients framework in a panel of sixty-eight countries over 1993-2013. It is shown that inflation targeting (IT) is effective even during and after the financial crisis and that explicit IT has a stronger effect on taming inflation persistence than implicit IT. It is shown that exchange regimes with the euro as a reserve currency are more effective than those using the U.S. dollar. On the other hand, U.S. inflation persistence exhibits a disproportionally lower effect on other countries' persistence than its German counterpart.

JEL-codes: C22 C32 E31 E52 F31 (search for similar items in EconPapers)
Date: 2018
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Citations: View citations in EconPapers (12)

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Related works:
Working Paper: The Impact of Monetary Strategies on Inflation Persistence (2017)
Working Paper: The impact of monetary strategies on inflation persistence (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:ijc:ijcjou:y:2018:q:3:a:6

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