Abstract
With the help of a regime switching model, we analyze a set of countries which adopted inflation targeting (IT) as a policy tool. We find that there is no statistical evidence to suggest that the adoption of IT causes a structural break in the inflation levels of the countries which adopt IT. We provide a theoretical explanation to this outcome, and investigate the implication of this outcome with a Zivot-Andrews test.
| Original language | English |
|---|---|
| Pages (from-to) | 237-241 |
| Number of pages | 5 |
| Journal | International Research Journal of Finance and Economics |
| Volume | 1 |
| Issue number | 24 |
| Publication status | Published - Feb 2009 |
| Externally published | Yes |
Keywords
- Inflation targeting
- International comparison
- Structural break