 Inflation Targets – What Factors Can Help to Explain Their LevelsJoanna Niedźwiedzińska ()
Central European Journal of Economic Modelling and Econometrics, 2020, vol. 12, issue 1, 47-89 Abstract: Inflation targeting is nowadays used by around 40 countries, with each of them tailoring some features of the strategy to its own needs. This holds especially for deciding on the level of inflation targets. The analysis conducted in the paper aims at identifying factors affecting the choice of the target levels, with macroeconomic, structural and institutional characteristics of the reviewed economies being investigated. The main conclusion is that both backward- and forward-looking models can help to explain how inflation targets are set. Evidently inflation and GDP growth (past and forecast) together with information on a possibly ongoing disinflation process are of key importance, but – especially for emerging market economies – also inflation variance and the level of economic development seem to influence the target levels. Moreover, many of the institutional features related, among others, to transparency and accountability of the reviewed central banks, were found significant in the analysis. Keywords: monetary policy; central banking; policy design (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:psc:journl:v:12:y:2020:i:1:p:47-89 Access Statistics for this article More articles in Central European Journal of Economic Modelling and Econometrics from Central European Journal of Economic Modelling and Econometrics |
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