Has the Adoption of Inflation Targeting Represented a Regime Switch? Empirical evidence from Canada, Sweden and the UK
Fiche du document
18 septembre 2008
- handle: 10670/1.q4gra1
- hal: hal-01064264
- SCIENCESPO: 2441/9543
Ce document est lié à :
info:eu-repo/semantics/altIdentifier/hdl/2441/9543
info:eu-repo/semantics/OpenAccess
Mots-clés
Inflation targeting MSVAR Counterfactuals E - Macroeconomics and Monetary Economics/E.E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit/E.E5.E52 - Monetary Policy E - Macroeconomics and Monetary Economics/E.E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit/E.E5.E58 - Central Banks and Their PoliciesSujets proches
Monetary management Targeting, InflationCiter ce document
Jérôme Creel et al., « Has the Adoption of Inflation Targeting Represented a Regime Switch? Empirical evidence from Canada, Sweden and the UK », Archive ouverte de Sciences Po (SPIRE), ID : 10670/1.q4gra1
Métriques
Partage / Export
Résumé
Since 1990, a growing number of countries have adopted inflation targeting (IT) around the world. Empirical evidence on its advantages has been mixed so far, and most assessments have been based on a control group methodology. In this paper, using a MSVAR technique, we assess the adoption of IT in three industrialised countries over time; in addition, we compare their outcomes with a non-IT country, the US. Results are manifold. First, an inflation targeting regime exists, although it does not constitute a change in monetary policy reaction. Second, this conclusion is robust on a subsample excluding the periods of high inflation and early sharp disinflation. Third, the sacrifice ratio of higher output volatility generally attributed to inflation stabilisation policies is not sensitive to the adoption of inflation targeting. Fourth, this framework is shown to be conducive to higher monetary policy leeway.