The influence of inflation targeting on the pass-through effect of the exchange rate

Ph. S. Kartaev () and Yu. I. Yakimova ()

Voprosy Ekonomiki, 2018, issue 11

Abstract: The paper studies the impact of the transition to the inflation targeting regime on the magnitude of the pass-through effect of the exchange rate to prices. We analyze cross-country panel data on developed and developing countries. It is shown that the transition to this regime of monetary policy contributes to a significant reduction in both the short- and long-term pass-through effects. This decline is stronger in developing countries. We identify the main channels that ensure the influence of the monetary policy regime on the pass-through effect, and examine their performance. In addition, we analyze the data of time series for Russia. It was concluded that even there the transition to inflation targeting led to a decrease in the dependence of the level of inflation on fluctuations in the ruble exchange rate.

Date: 2018
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Persistent link: https://EconPapers.repec.org/RePEc:nos:voprec:y:2018:id:1518

DOI: 10.32609/0042-8736-2018-11-70-84

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