Inflation targeting and inflation convergence: International evidence
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2014-04Keyword
Inflation targets; Inflation targeting; Inflation convergence; Pair-wise approach; Unit rootsRights
© 2014 Elsevier. Reproduced in accordance with the publisher's selfarchiving policy. This manuscript version is made available under the CC-BY-NC-ND 4.0 license http://creativecommons.org/licenses/by-nc-nd/4.0/Peer-Reviewed
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We examine whether the inflation rates of the countries that pursueinflation targeting policies have converged as opposed to the expe-rience of the OECD non-inflation targeters. Using a methodologyintroduced by Pesaran (2007a), we examine the stationarity prop-erties of the inflation differentials. This approach has the advantageof avoiding setting arbitrarily a specific country as the benchmarkeconomy. Our results indicate that the inflation rates converge irre-spective of the monetary policy framework.Version
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Arestis P, Chortareas G, Magkonis G, and Moschos D (2014) Inflation targeting and inflation convergence: International evidence. Journal of International Financial Markets, Institutions and Money. 31: 285-295.Link to publisher’s version
http://dx.doi.org/10.1016/j.intfin.2014.04.002Type
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