Inflation targeting and inflation convergence: international evidence

Philip Arestis; Georgios Chortareas; Georgios Magkonis; Demetrios Moschos

doi:10.1016/j.intfin.2014.04.002

Inflation targeting and inflation convergence: international evidence

Philip Arestis, Georgios Chortareas, Georgios Magkonis, Demetrios Moschos

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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 of 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.

Original language	English
Pages (from-to)	285-295
Number of pages	11
Journal	Journal of International Financial Markets, Institutions and Money
Volume	31
Early online date	21 Apr 2014
DOIs	https://doi.org/10.1016/j.intfin.2014.04.002
Publication status	Published - 1 Jul 2014

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Keywords

inflation targeting
inflation convergence
pair-wise approach
unit roots

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10.1016/j.intfin.2014.04.002

MAGKONIS_2014_cright_Inflation Targeting and Inflation ConvergenceAccepted author manuscript (Post-print), 324 KBLicence: CC BY-NC-ND

http://linkinghub.elsevier.com/retrieve/pii/S104244311400050X

Cite this

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title = "Inflation targeting and inflation convergence: international evidence",

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 of 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.",

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AU - Arestis, Philip

AU - Chortareas, Georgios

AU - Magkonis, Georgios

AU - Moschos, Demetrios

N1 - NOTICE: this is the author’s version of a work that was accepted for publication in Journal of International Financial Markets, Institutions & Money. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication. A definitive version was subsequently published in Journal of International Financial Markets, Institutions & Money, (2014), DOI: 10.1016/j.intfin.2014.04.002

PY - 2014/7/1

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N2 - 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 of 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.

AB - 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 of 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.

KW - inflation targeting

KW - inflation convergence

KW - pair-wise approach

KW - unit roots

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DO - 10.1016/j.intfin.2014.04.002

M3 - Article

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EP - 295

JO - Journal of International Financial Markets, Institutions and Money

JF - Journal of International Financial Markets, Institutions and Money

ER -

Inflation targeting and inflation convergence: international evidence

Abstract

UN SDGs

Keywords

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