Does Monetary Policy Regime Affect Inflation?
https://doi.org/10.38050/01300105201653
Abstract
The article treats long-term impact of monetary policy nominal anchor choice (inflation targeting, exchange rate targeting, money supply targeting) on inflation level in developed and emerging countries. The research was built on panel data for 188 countries, which includes period after the global financial crisis. The results show, that inflation or exchange rate targeting allows to reduce inflation rate in emerging countries, while in developed countries the use of monetary policy nominal anchor does not give additional benefits in inflation control. This difference can be explained by the fact, that nominal anchor implementation in emerging countries enhances public confidence in monetary authority actions to control inflation. Higher confidence decreases inflation expectations and hence inflation. In contrast, central banks of developed countries can stabilize price level without use of nominal anchor due to good reputation.
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Review
For citations:
Kartaev F.S. Does Monetary Policy Regime Affect Inflation? Moscow University Economics Bulletin. 2016;(5):39-51. (In Russ.) https://doi.org/10.38050/01300105201653
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