How effective is inflation targeting in emerging market economies?

Thanaset Chevapatrakul () and Juan Paez-Farrell
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Thanaset Chevapatrakul: Nottingham University Business School

No 2018005, Working Papers from The University of Sheffield, Department of Economics

Abstract: We re-assess the links between inflation targeting and economic performance in a sample of developing countries. We estimate the effects of inflation targeting (IT) using quantile regressions, thus enabling us to consider the whole distribution rather than focusing on the effects at the mean. Our findings indicate that following the implementation of IT, it is the least successful countries – those that have reduced inflation the least – that benefit the most. For the remainder there are no benefits to be had from IT. We also find no evidence that IT affects economic volatility. We provide a small model to account for this evidence.

Keywords: Quantile regression; inflation targeting; emerging markets; monetary policy (search for similar items in EconPapers)
JEL-codes: E52 E58 (search for similar items in EconPapers)
Pages: 24 pages
Date: 2018-05
New Economics Papers: this item is included in nep-mac and nep-mon
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Citations: View citations in EconPapers (3)

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http://www.sheffield.ac.uk/economics/research/serps/articles/2018_005 First version, May 2018 (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:shf:wpaper:2018005

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