Is Inflation Targeting Successful in Emerging Economies?

Abstract

Inflation targeting started in 1990 and since then, many industrial and emerging market economies have adopted it. This chapter attempts to study the impact of adoption of inflation targeting on major macroeconomic outcomes across the emerging market countries, by running a panel data study from 1980 to 2018. This chapter obtains mixed results with respect to different macroeconomic indicators. The empirical results indicate that inflation targeting has been successful in bringing down inflation, inflation volatility and GDP growth rate volatility, while inconclusive results are obtained for volatility in exchange rates.

Citation

Agarwal, V. and Ghosh, T. (2021), "Is Inflation Targeting Successful in Emerging Economies?", Barnett, W.A. and Sergi, B.S. (Ed.) Recent Developments in Asian Economics International Symposia in Economic Theory and Econometrics (International Symposia in Economic Theory and Econometrics, Vol. 28), Emerald Publishing Limited, Leeds, pp. 143-155. https://doi.org/10.1108/S1571-038620210000028008