A new test for the success of inflation targeting

  title={A new test for the success of inflation targeting},
  author={Torcuato Di Tella and Ver{\'o}nica Cohen and Mart{\'i}n Gonzalez Rozada and Andrew Powell},
We propose a new test, derived from a set of variance decompositions of a structural VAR, for the success of inflation targeting. In contrast to standard sacrifice ratios this test considers changes in the structure of real and nominal shocks; second moment effects. We find strong support for IT with 7 of the 9 countries in our sample having negative “sacrifices” and many countries with “benefits”. However, we also find very different performances across IT countries. We find that “IT success… CONTINUE READING

From This Paper

Figures, tables, and topics from this paper.


Publications referenced by this paper.
Showing 1-6 of 6 references

Inflation targeting in Brazil, Chile and Mexico: performance, credibility and the exchange

  • K. Schmidt Hebbel, A. Werner
  • rate” Economia,
  • 2002
Highly Influential
5 Excerpts

Assessing Inflation Targeting after a decade of experience

  • V. Corbo, O. Lamderretche, K. Schmidt Hebbel
  • mimeo. Catholic University of Chile
  • 2001
1 Excerpt

Accounting for real and nominal exchange rate movements in the post-Bretton Woods period

  • W Enders, B. Lee
  • Journal of International Money and Finance,
  • 1997
3 Excerpts

Similar Papers

Loading similar papers…