Assessing the Performance of Inflation Targeting in East Asian economies

Hiroyuki Taguchi () and Chizuru Kato

Macroeconomics Working Papers from East Asian Bureau of Economic Research

Abstract: This paper aims at assessing the performance of the inflation targeting framework from the quantitative perspective of the money and inflation relationship, focusing on the four East Asian economies, i.e. Korea, Indonesia, Thailand and the Philippines, who adopted the inflation targeting framework soon after the 1997-98 Asian currency crisis. Our estimation results told us that the inflation targeting framework in the sample economies, except for the Philippines, has functioned well as an anchor to curb inflation, in the sense that the framework speeds up price adjustment against money supply compared with their previous regime of pegged exchange rates. We interpret the speeding-up of price adjustment under inflation targeting framework in such a way that the framework may have been able to curb inflation through stabilizing inflationary expectations. We also found that the well-functioning inflation targeting framework was consistent with another estimation outcome : that of enhanced monetary autonomy under the post-crisis floating exchange rate regime.

Keywords: inflation targeting framework; East Asian emerging market economy; money-inflation relationship; co-integration test; error correction estimation (search for similar items in EconPapers)
JEL-codes: C23 E52 F33 (search for similar items in EconPapers)
Date: 2010-01
References: Add references at CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
http://www.eaber.org/node/23078 (application/pdf)
Our link check indicates that this URL is bad, the error code is: 301 [REDIRECT LOOP] Moved Permanently (http://www.eaber.org/node/23078 [301 Moved Permanently]--> https://www.eaber.org/node/23078 [301 Moved Permanently]--> https://www.eaber.org/node/23078 [301 Moved Permanently]--> https://www.eaber.org/node/23078 [301 Moved Permanently]--> https://www.eaber.org/node/23078 [301 Moved Permanently]--> https://www.eaber.org/node/23078 [301 Moved Permanently]--> https://www.eaber.org/node/23078 [301 Moved Permanently]--> https://www.eaber.org/node/23078)

Related works:
Journal Article: Assessing the performance of inflation targeting in East Asian economies (2011)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eab:macroe:23078

Access Statistics for this paper

More papers in Macroeconomics Working Papers from East Asian Bureau of Economic Research Contact information at EDIRC.
Bibliographic data for series maintained by Shiro Armstrong ().