Does inflation targeting matter for price stability?

Minjie Guo and Eun-Son Lim

International Review of Economics & Finance, 2024, vol. 91, issue C, 1015-1032

Abstract: Since New Zealand embraced Inflation Targeting (IT) as a monetary policy in 1990, numerous countries have followed suit. The inherent high accountability and transparency associated with central banks operating under an IT policy are anticipated to facilitate the attainment of price stability. This study aims to investigate the potential positive impact of IT policy on price stability by examining whether its implementation results in shorter durations of High Inflation Episodes (HIEs). HIEs are defined as periods during which a country experiences sustained and consecutive high inflation rates for a specific duration. We employ Survival Analysis with data spanning from 1980: Q1 to 2022: Q4 to explore this aspect.

Keywords: Inflation targeting; Survival analysis; High inflation episodes (search for similar items in EconPapers)
JEL-codes: E31 E52 E58 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:reveco:v:91:y:2024:i:c:p:1015-1032

DOI: 10.1016/j.iref.2024.01.035

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