Inflation targeting and the cyclicality of monetary policy

Thornton, John and Vasilakis, Chrysovalantis (2017) Inflation targeting and the cyclicality of monetary policy. Finance Research Letters, 20 (2). ISSN 1544-6123

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Abstract

We assess whether the adoption of inflation targeting (IT) frameworks has facilitated countercyclical monetary policies in a sample of 90 industrial and developing economies, 22 of which have adopted IT. Using propensity score matching methods, we show that the aver- age treatment effect of IT has a statistically significant and quantitatively quite large effect in facilitating a more countercyclical monetary policy in IT adopting countries.

Item Type: Article
Uncontrolled Keywords: inflation targeting, monetary policy cyclicality, treatment effect, propensity score matching
Faculty \ School: Faculty of Social Sciences > Norwich Business School
Depositing User: LivePure Connector
Date Deposited: 16 Sep 2019 07:30
Last Modified: 12 Nov 2020 01:02
URI: https://ueaeprints.uea.ac.uk/id/eprint/72205
DOI: 10.1016/j.frl.2016.10.012

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