Inflation Targeting on Unemployment rates: A Quantile Treatment Effect Approach

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Title:	Inflation Targeting on Unemployment rates: A Quantile Treatment Effect Approach
Authors:	Huang, H. C.;Yeh, C. C.
Contributors:	財務金融學系暨研究所
Keywords:	inflation targeting;unemployment rate;propensity score matching;entropy balancing;quantile treatment effect;E4;E5;G1;G2
Date:	2014-01-14
Issue Date:	2014-12-04 15:28:02 (UTC+8)
Abstract:	This article explores the treatment effects of inflation targeting (IT) on unemployment rates across a large panel of 74 countries over the 1980–2010 period. By addressing the ‘self-selection’ problem of policy adoption via a variety of propensity score matching algorithms, we first find that, on average, IT exerts no discernible effect on unemployment rates in the full sample. However, when the full sample is split into subgroups, the results strongly indicate that the adoption of IT is associated with higher (lower) unemployment rate in the industrial (developing) countries. Further outcome from a novel quantile treatment effects approach points out that the higher the unemployment rate is in the first place, the more harmful (beneficial) the implementation of IT becomes in the industrial (developing) subsample.
Relation:	Applied Economics Letters 21(7), pp.453-458
DOI:	10.1080/13504851.2013.866198
Appears in Collections:	[Graduate Institute & Department of Banking and Finance] Journal Article

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