Inflation targeting and output-inflation tradeoffs

機構典藏 > College of Business and Management > Graduate Institute & Department of Banking and Finance > Journal Article > Item 987654321/116900

Please use this identifier to cite or link to this item: https://tkuir.lib.tku.edu.tw/dspace/handle/987654321/116900

Title:	Inflation targeting and output-inflation tradeoffs
Authors:	Ho-Chuan, Huang;Chih-Chuan, Yeh;Wang, Xiuhua
Keywords:	Inflation targeting;Output-inflation tradeoff;Endogenous switching regression;Globalization;Exchange rate regime
Date:	2019-09
Issue Date:	2019-06-28 12:10:33 (UTC+8)
Publisher:	Elsevier
Abstract:	This article assesses whether the adoption of inflation targeting (IT) helps reduce the output-inflation tradeoff. We address the self-selection problem of IT policy adoption by the endogenous switching regressions, and show that the output-inflation tradeoffs are significantly lower in IT countries not only over the whole sample but also across the developed and developing country subsamples. In addition, we also find strong evidence supporting the positive selection hypothesis, i.e., countries have higher probability of adopting IT are exactly those who benefit more (larger reduction of output-inflation tradeoff) from the implementation of IT. Additional results reveal that economies with higher trade openness, lower financial openness, and less flexible exchange rate regime are associated with larger tradeoff between output and inflation, but the effects are only statistically significant in the IT regime.
Relation:	Journal of International Money and Finance 96, p.102-120
DOI:	10.1016/j.jimonfin.2019.04.009
Appears in Collections:	[Graduate Institute & Department of Banking and Finance] Journal Article

Files in This Item:

File	Description	Size	Format
index.html		0Kb	HTML	186	View/Open
Inflation targeting and output-inflation tradeoffs.pdf		525Kb	Adobe PDF	1	View/Open