Master of Science
Department or Program
DR. SCOTT GILBERT
In this paper, we subject a seeming consensus on the impact of inflation targeting in emerging market economies to some robustness assessments. First we report performance along carefully redefined country brackets, we find little evidence to support the notion that economies with inflation targeting policies performed better than non-targeting economies in terms of GDP growth, inflation and economic volatility. In fact, there is a suggestion in the results that amongst certain clusters of economies, certain restrictive aspects of the policy actually inhibit growth
In a subsequent assessment, we control for extent of development using specific country proxies but equally observe, consistent with the above, that no evidence exists in the data of superior overall performances due to the practice of inflation targeting.