Assessing the macroeconomic effects of inflation targeting: Evidence from OECD Economies

With the numerous monetary policy reforms undertaken during the 1990s, inflation targeting emerged as one of the possible solutions. The macroeconomic performance of this regime has attracted the attention of recent research, yet no final consensus on its role is reached. The aim of this paper is to contribute to this debate through a panoply of mixed results proven by the recent literature. Empirically, the purpose of this study is to assess the impact of inflation targeting on inflation and output based on a panel of 30 OECD countries over the period 1980_2012, using the “differences-in- differences” approach of Ball and Sheridan (2005). Our results indicate that inflation targeting helps to improve macroeconomic performance of targeters OECD countries more than non- targeters in terms of average inflation and volatility. Our findings corroborate previous studies like those of Wu (2004), Ball and Sheridan (2005) and Manai,O (2014). However, our results point to an insignificant impact of this regime on output consistent with Gonçalves- Salles (2008) and Ftiti & Essadi (2013). However, our results contrast those of S-Hebbel (2007) and Ftiti J. Goux (2011) which assume that there is no difference between targeters and non-targeters OECD countries

Assessing the macroeconomic effects of inflation targeting: Evidence from OECD Economies

With the numerous monetary policy reforms undertaken during the 1990s, inflation targeting emerged as one of the possible solutions. The macroeconomic performance of this regime has attracted the attention of recent research, yet no final consensus on its role is reached. The aim of this paper is to contribute to this debate through a panoply of mixed results proven by the recent literature. Empirically, the purpose of this study is to assess the impact of inflation targeting on inflation and output based on a panel of 30 OECD countries over the period 1980_2012, using the “differences-in- differences” approach of Ball and Sheridan (2005). Our results indicate that inflation targeting helps to improve macroeconomic performance of targeters OECD countries more than non- targeters in terms of average inflation and volatility. Our findings corroborate previous studies like those of Wu (2004), Ball and Sheridan (2005) and Manai,O (2014). However, our results point to an insignificant impact of this regime on output consistent with Gonçalves- Salles (2008) and Ftiti & Essadi (2013). However, our results contrast those of S-Hebbel (2007) and Ftiti J. Goux (2011) which assume that there is no difference between targeters and non-targeters OECD countries

Inflation Targeting, Economic Growth and Financial Stability: Evidence from Emerging Countries

Our aim of this paper is to determine whether inflation targeting could improve economic growth and financial stability in 35 emerging economies of which 19 inflation-targeting and 16 non-inflation-targeting countries over the 1995–2017 period. To this end, we first determine the preconditions needed to adopt the inflation targeting regime using the Qualitative Comparative Analysis method (QCA). We then construct a Financial Stability Index (FSI) for emerging markets using a Principal Components Analysis (PCA). Finally, we determine the impact of shocks on economic growth and financial stability in inflation-targeting and non-inflation-targeting countries through a Panel VAR model estimated using the GMM method. The results show that some structural and institutional preconditions, should be set up during the pre-adoption period. In addition, the results indicate that the inflation-targeting regime allows emerging countries to control their economic growth and financial stability in the event of shocks to a greater extent than non-targeting countries, although the magnitude of the shock persists only in the short run, given that economic and financial conditions return to their normal state in the long run

International Journal of Economics, Finance and Management Assessing the Macroeconomic Effects of Inflation Targeting: Evidence from OECD Economies 1

ABSTRACT With the numerous monetary policy reforms undertaken during the 1990s, inflation targeting emerged as one of the possible solutions. The macroeconomic performance of this regime has attracted the attention of recent research, yet no final consensus on its role is reached. The aim ofthis paper is to contribute to this debate through panoply of mixed results proven by the recent literature. Empirically, the purpose of this study is to assess the impact of inflation targeting on inflation and output based on a panel of 30OECD countries over theperiod1980_2012, using the "differences-indifferences" approach of Ball and Sheridan (2005). Our results indicate that inflation targeting helps to improve macroeconomic performance of targeted OECD countries more than non-marketers in terms of average inflation and volatility. Our findings corroborate previous studies like those of W

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