Inflation targeting in Korea, Indonesia, Thailand, and the Philippines: the impact on business cycle synchronization between each country and the world

Takeshi Inoue, Yuki Toyoshima () and Shigeyuki Hamori

No 328, IDE Discussion Papers from Institute of Developing Economies, Japan External Trade Organization(JETRO)

Abstract: This paper empirically analyzes whether and to what extent the adoption of inflation targeting (IT) in Korea, Indonesia, Thailand and the Philippines has affected their business cycle synchronization with the rest of the world. By employing the dynamic conditional correlation (DCC) model developed by Engle (2002), we find that IT in Asia has little effect on international business cycle synchronization and the effect is positive in some of the countries, if any. These findings basically seem to be consistent with the evidence from relevant literature.

Keywords: Southeast Asia; Indonesia; Thailand; Philippines; South Korea; Inflation; Business cycles; Asia; Business cycle synchronization; DCC; Inflation targeting (search for similar items in EconPapers)
JEL-codes: E31 E32 E52 E58 F42 F44 (search for similar items in EconPapers)
Date: 2012-03-01
New Economics Papers: this item is included in nep-cba, nep-mac, nep-mon and nep-sea
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Citations: View citations in EconPapers (8)

Published in IDE Discussion Paper = IDE Discussion Paper, No. 328. 2012-03-01

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