Where did inflation targeting matter?

• Autor(a) principal: Barbosa, Rodrigo dos Santos
• Data de Publicação: 2018
• Outros Autores: Brito, Ricardo D., Teles, Vladimir Kuhl
• Tipo de documento: Artigo
• Idioma: eng
• Título da fonte: Repositório Institucional do FGV (FGV Repositório Digital)
• Texto Completo: http://hdl.handle.net/10438/24925
• topic: Inflation targeting; Inflation-output growth short-run tradeoff; Synthetic control; Case study; Economia; Inflação; Política monetária

We investigate the effects of inflation targeting (IT) adoption on industrial economies by comparing each inflation targeter country (ITer) with its synthetic control, defined as the convex combination of non-IT countries that best reproduce the ITer counterfactual inflation trajectory. We show that most of the ITers enjoyed lower inflation and higher output growth than their synthetics in most of the 1990 years’ IT experience. Although those gains could be transitory, they were economically important to justify IT Central Banks optimism with their regime choice, both case-by-case and on average.