Assessing Inflation Targeting after a Decade of World Experience
Oscar Landerretche () and
Klaus Schmidt-Hebbel ()
Additional contact information
Oscar Landerretche: Massachusetts Institute of Technology
Working Papers from Oesterreichische Nationalbank (Austrian Central Bank)
Ten years of inflation targeting worldwide provide valuable lessons. Inflation targeters (ITers) have been very successful in meeting their inflation targets (ITs). Industrial output sacrifice during inflation stabilization and industrial output volatility has frequently been lowered after IT adoption. ITers have consistently reduced inflation forecast errors after IT adoption. The influence of price and output shocks on the behavior of inflation and output gaps has changed much more strongly among ITers than in non-targeting industrial countries in the course of the 1990s. IT has played a role in strengthening the effect of forward-looking expectations on inflation, hence weakening the weight of past inflation inertia. Central bankersÂ’ aversion to inflation is on average not different among ITers in comparison to NITers but has risen in emerging-country ITers. ITers have gradually reaped a credibility gain, allowing them to achieve their targets with smaller changes in interest rates in the late 1990s than the changes that were required in the early 1990s.
JEL-codes: E52 E58 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cba, nep-lam, nep-mac and nep-mon
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (86) Track citations by RSS feed
Downloads: (external link)
https://www.oenb.at/dam/jcr:8c1accd2-ec1d-4729-873 ... /wp51_tcm16-6138.pdf (application/pdf)
Our link check indicates that this URL is bad, the error code is: 403 Forbidden (https://www.oenb.at/dam/jcr:8c1accd2-ec1d-4729-8739-271b458d6e14/wp51_tcm16-6138.pdf [303 See Other]--> https://www.oenb.at/error_path/403.html?al_req_id=YzLW6VvqvIuxyISkDdXfWQAAAAo)
Journal Article: Assessing Inflation Targeting after a Decade of World Experience (2001)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:onb:oenbwp:51
Ordering information: This working paper can be ordered from
Oesterreichische Nationalbank, Economic Studies Division, POB 61, A-1011 Vienna, Austria
The price is Free subject to availability.
Access Statistics for this paper
More papers in Working Papers from Oesterreichische Nationalbank (Austrian Central Bank) P.O. Box 61, A-1011 Vienna, Austria. Contact information at EDIRC.
Bibliographic data for series maintained by Markus Knell ().