JOURNAL ARTICLE

Inflation target adjustments: Does an improvement in institutional or economic preconditions matter?

  • Published In: International Finance, 2024, v. 27, n. 2. P. 129 1 of 3

  • Database: Business Source Ultimate 2 of 3

  • Authored By: Cho, Dooyeon; Kim, Husang 3 of 3

Abstract

This paper investigates how the commitment to maintain an established inflation target as opposed to changing it depends on the extent to which institutional or economic preconditions improve in a country. For 19 inflation‐targeting countries, we show that stronger operational commitment to the preannounced target is pronounced in countries with a greater improvement in institutional or economic preconditions, such as central bank independence, inflation, government indebtedness, financial development and central bank credibility. Our results also highlight the heterogeneous contingencies for the discretionary behaviour of adjusting the target, including the gradual disinflation phase, fiscal dominance and the transition to flexible targeting. [ABSTRACT FROM AUTHOR]

Additional Information

  • Source:International Finance. 2024/08, Vol. 27, Issue 2, p129
  • Document Type:Article
  • Subject Area:Social Sciences and Humanities
  • Publication Date:2024
  • ISSN:1367-0271
  • DOI:10.1111/infi.12448
  • Accession Number:178945253
  • Copyright Statement:Copyright of International Finance is the property of Wiley-Blackwell and its content may not be copied or emailed to multiple sites without the copyright holder's express written permission. Additionally, content may not be used with any artificial intelligence tools or machine learning technologies. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

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