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Inflation targeting and inflation convergence: International evidence


Type

Article

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Authors

Chortareas, G 
Magkonis, G 
Moschos, D 

Abstract

We examine whether the inflation rates of the countries that pursue inflation targeting policies have converged as opposed to the experience of the OECD non-inflation targeters. Using a methodology introduced by Pesaran (2007a), we examine the stationarity properties 0f the inflation differentials. This approach has the advantage of avoiding setting arbitrarily a specific country as the benchmark economy. Our results indicate that the inflation rates converge irrespective of the monetary policy framework.

Description

Keywords

Inflation targeting, Inflation convergence, Pair wise approach, Unit roots

Journal Title

Journal of International Financial Markets, Institutions and Money

Conference Name

Journal ISSN

1042-4431

Volume Title

31

Publisher

Elsevier BV