Right on Target: Exploring the Determinants of Inflation Targeting Adoption
Hanna Samaryna and
Jakob de Haan ()
Authors registered in the RePEc Author Service: Anna Samarina ()
DNB Working Papers from Netherlands Central Bank, Research Department
This paper examines which economic, fiscal, external, financial, and institutional characteristics of countries affect the likelihood that they adopt inflation targeting as their monetary policy strategy. We estimate a panel binary response transition model for 60 countries and two subsamples consisting of OECD and non-OECD countries over the period 1985-2008. The findings suggest that past macroeconomic performance of a country, its fiscal discipline, exchange rate arrangements, as well as the structure and development of its financial system have a significant impact on the likelihood to adopt inflation targeting. However, the determinants of inflation targeting differ between OECD and non-OECD countries.
Keywords: inflation targeting; monetary policy strategy (search for similar items in EconPapers)
JEL-codes: E42 E52 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cba, nep-mac and nep-mon
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Persistent link: https://EconPapers.repec.org/RePEc:dnb:dnbwpp:321
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