Does Inflation Targeting Matter for Output Growth? Evidence from Industrial and Emerging Economies
This paper examines the effects of inflation targeting on industrial and emerging economies' output growth over the "globalization years" of 1986-2004. Controlling for trade openness and two indicators of financial globalization, the...
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| Format: | Policy Research Working Paper |
| Language: | English |
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Washington, DC: World Bank
2012
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| Online Access: | http://documents.worldbank.org/curated/en/2008/12/10077499/inflation-targeting-matter-output-growth-evidence-industrial-emerging-economies http://hdl.handle.net/10986/6296 |
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okr-10986-6296 |
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oai_dc |
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Digital Repository |
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Foreign Institution |
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Digital Repositories |
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World Bank Open Knowledge Repository |
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World Bank |
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English |
| topic |
ACCOUNTING ASSETS BANK OPERATIONS BOND BUSINESS CYCLES BUSINESS ECONOMICS CAPITAL ACCOUNT CAPITAL ACCOUNT LIBERALIZATION CAPITAL ACCOUNT OPENNESS CAPITAL ACCUMULATION CAPITAL FLOWS CAPITAL GOODS CAPITAL INFLOWS CENTRAL BANK CENTRAL BANKS COLLATERAL CONTROL VARIABLES CORRELATION COEFFICIENT CORRELATION COEFFICIENTS COUNTRY ECONOMICS CREDIBILITY CURRENCY DEBT DEBT MATURITY DEBT STRUCTURE DEPENDENT VARIABLE DESCRIPTIVE STATISTICS DEVELOPING COUNTRIES DEVELOPING ECONOMIES DEVELOPMENT ECONOMICS DIRECT INVESTMENT DISINFLATION DOMESTIC SECURITIES DUMMY VARIABLE DUMMY VARIABLES ECONOMIC GROWTH ECONOMIC PERFORMANCE ECONOMIC RESEARCH EMERGING ECONOMIES EMERGING MARKET EMERGING MARKET ECONOMIES EMERGING MARKETS EMERGING MARKETS ECONOMIES EQUATIONS EQUIPMENT EQUITY FINANCING EQUITY MARKET ERROR TERM EXCHANGE RATE EXCHANGE RATE TARGETING EXCHANGE RATE VOLATILITY EXPLANATORY VARIABLE EXPLANATORY VARIABLES EXPORTS EXTERNAL ASSETS EXTERNAL POSITION FEDERAL RESERVE FEDERAL RESERVE BANK FINANCIAL CRISES FINANCIAL DEVELOPMENT FINANCIAL FLOWS FINANCIAL INSTITUTIONS FINANCIAL INTEGRATION FINANCIAL LIBERALIZATION FINANCIAL MARKETS FINANCIAL OPENNESS FINANCIAL SECTOR FINANCIAL SECTOR DEVELOPMENT FIXED EFFECTS FOREIGN ASSETS FOREIGN DIRECT INVESTORS FOREIGN INVESTORS GDP GDP PER CAPITA GLOBAL DISINFLATION GLOBALIZATION GROWTH RATE GROWTH RATES IMPORTS INCOME INCOME GROWTH INDUSTRIAL COUNTRIES INDUSTRIAL ECONOMIES INDUSTRIAL ECONOMY INFLATION INFLATION COMMITMENT INFLATION ENVIRONMENT INFLATION EXPECTATIONS INFLATION TARGETING INFLATION TARGETING REGIMES INFLATION TARGETS INSTRUMENTAL VARIABLES INTEREST PARITY INTEREST RATE INTEREST RATES INTERNATIONAL BANK INTERNATIONAL ECONOMICS INTERNATIONAL FINANCIAL INTEGRATION INTERNATIONAL FINANCIAL STATISTICS INTERNATIONAL MONEY INVESTMENT ASSETS INVESTMENT DECISIONS LIABILITY LIBERALIZATION LIBERALIZATIONS LOCAL FINANCIAL MARKETS LONG-TERM DEBT MACROECONOMICS MATURITY MATURITY STRUCTURE MONETARY ECONOMICS MONETARY POLICIES MONETARY POLICY MONETARY POLICY REGIMES MONETARY REGIMES MONOPOLIES NOMINAL INCOME OUTPUT OUTPUT GAP OUTPUT LOSSES OUTPUT PER CAPITA OUTPUT RATIO OUTPUT RATIOS PER CAPITA INCOME POLITICAL ECONOMY POPULATION GROWTH PORTFOLIO POSITIVE EFFECTS POTENTIAL OUTPUT PRICE STABILITY PUBLIC FINANCE REAL EXCHANGE RATE REAL GDP REGRESSION ANALYSIS RETURNS SECURITIES SERIAL CORRELATION STABLE INFLATION STOCHASTIC ERROR STOCK MARKET STOCKS SUM OF IMPORTS TRADE LIBERALIZATION TRADE OPENNESS TRADE UNIONS UNCERTAINTY WEALTH WORLD MARKET WORLD MARKET INTEGRATION |
| spellingShingle |
ACCOUNTING ASSETS BANK OPERATIONS BOND BUSINESS CYCLES BUSINESS ECONOMICS CAPITAL ACCOUNT CAPITAL ACCOUNT LIBERALIZATION CAPITAL ACCOUNT OPENNESS CAPITAL ACCUMULATION CAPITAL FLOWS CAPITAL GOODS CAPITAL INFLOWS CENTRAL BANK CENTRAL BANKS COLLATERAL CONTROL VARIABLES CORRELATION COEFFICIENT CORRELATION COEFFICIENTS COUNTRY ECONOMICS CREDIBILITY CURRENCY DEBT DEBT MATURITY DEBT STRUCTURE DEPENDENT VARIABLE DESCRIPTIVE STATISTICS DEVELOPING COUNTRIES DEVELOPING ECONOMIES DEVELOPMENT ECONOMICS DIRECT INVESTMENT DISINFLATION DOMESTIC SECURITIES DUMMY VARIABLE DUMMY VARIABLES ECONOMIC GROWTH ECONOMIC PERFORMANCE ECONOMIC RESEARCH EMERGING ECONOMIES EMERGING MARKET EMERGING MARKET ECONOMIES EMERGING MARKETS EMERGING MARKETS ECONOMIES EQUATIONS EQUIPMENT EQUITY FINANCING EQUITY MARKET ERROR TERM EXCHANGE RATE EXCHANGE RATE TARGETING EXCHANGE RATE VOLATILITY EXPLANATORY VARIABLE EXPLANATORY VARIABLES EXPORTS EXTERNAL ASSETS EXTERNAL POSITION FEDERAL RESERVE FEDERAL RESERVE BANK FINANCIAL CRISES FINANCIAL DEVELOPMENT FINANCIAL FLOWS FINANCIAL INSTITUTIONS FINANCIAL INTEGRATION FINANCIAL LIBERALIZATION FINANCIAL MARKETS FINANCIAL OPENNESS FINANCIAL SECTOR FINANCIAL SECTOR DEVELOPMENT FIXED EFFECTS FOREIGN ASSETS FOREIGN DIRECT INVESTORS FOREIGN INVESTORS GDP GDP PER CAPITA GLOBAL DISINFLATION GLOBALIZATION GROWTH RATE GROWTH RATES IMPORTS INCOME INCOME GROWTH INDUSTRIAL COUNTRIES INDUSTRIAL ECONOMIES INDUSTRIAL ECONOMY INFLATION INFLATION COMMITMENT INFLATION ENVIRONMENT INFLATION EXPECTATIONS INFLATION TARGETING INFLATION TARGETING REGIMES INFLATION TARGETS INSTRUMENTAL VARIABLES INTEREST PARITY INTEREST RATE INTEREST RATES INTERNATIONAL BANK INTERNATIONAL ECONOMICS INTERNATIONAL FINANCIAL INTEGRATION INTERNATIONAL FINANCIAL STATISTICS INTERNATIONAL MONEY INVESTMENT ASSETS INVESTMENT DECISIONS LIABILITY LIBERALIZATION LIBERALIZATIONS LOCAL FINANCIAL MARKETS LONG-TERM DEBT MACROECONOMICS MATURITY MATURITY STRUCTURE MONETARY ECONOMICS MONETARY POLICIES MONETARY POLICY MONETARY POLICY REGIMES MONETARY REGIMES MONOPOLIES NOMINAL INCOME OUTPUT OUTPUT GAP OUTPUT LOSSES OUTPUT PER CAPITA OUTPUT RATIO OUTPUT RATIOS PER CAPITA INCOME POLITICAL ECONOMY POPULATION GROWTH PORTFOLIO POSITIVE EFFECTS POTENTIAL OUTPUT PRICE STABILITY PUBLIC FINANCE REAL EXCHANGE RATE REAL GDP REGRESSION ANALYSIS RETURNS SECURITIES SERIAL CORRELATION STABLE INFLATION STOCHASTIC ERROR STOCK MARKET STOCKS SUM OF IMPORTS TRADE LIBERALIZATION TRADE OPENNESS TRADE UNIONS UNCERTAINTY WEALTH WORLD MARKET WORLD MARKET INTEGRATION Mollick, André Varella Torres, René Cabral Carneiro, Francisco G. Does Inflation Targeting Matter for Output Growth? Evidence from Industrial and Emerging Economies |
| relation |
Policy Research Working Paper; No. 4791 |
| description |
This paper examines the effects of
inflation targeting on industrial and emerging
economies' output growth over the "globalization
years" of 1986-2004. Controlling for trade openness and
two indicators of financial globalization, the authors find
systematic positive and significant effects of inflation
targeting on real output growth. In dynamic models, the
findings show strong output persistence in industrial
economies, in which partial and full inflation targeting
regimes have a positive long-run impact on growth. In
emerging markets, only full inflation targeting policies
have any output effect in the long-run. The results suggest
that strict inflation targeting is needed to make the
discipline effect of the disinflation process outweigh the
output costs of promoting high interest rates to attract
capital flows in a global world. These findings are robust
to the treatment of endogenous globalization measures. |
| format |
Publications & Research :: Policy Research Working Paper |
| author |
Mollick, André Varella Torres, René Cabral Carneiro, Francisco G. |
| author_facet |
Mollick, André Varella Torres, René Cabral Carneiro, Francisco G. |
| author_sort |
Mollick, André Varella |
| title |
Does Inflation Targeting Matter for Output Growth? Evidence from Industrial and Emerging Economies |
| title_short |
Does Inflation Targeting Matter for Output Growth? Evidence from Industrial and Emerging Economies |
| title_full |
Does Inflation Targeting Matter for Output Growth? Evidence from Industrial and Emerging Economies |
| title_fullStr |
Does Inflation Targeting Matter for Output Growth? Evidence from Industrial and Emerging Economies |
| title_full_unstemmed |
Does Inflation Targeting Matter for Output Growth? Evidence from Industrial and Emerging Economies |
| title_sort |
does inflation targeting matter for output growth? evidence from industrial and emerging economies |
| publisher |
Washington, DC: World Bank |
| publishDate |
2012 |
| url |
http://documents.worldbank.org/curated/en/2008/12/10077499/inflation-targeting-matter-output-growth-evidence-industrial-emerging-economies http://hdl.handle.net/10986/6296 |
| _version_ |
1764399819356372992 |
| spelling |
okr-10986-62962021-04-23T14:02:30Z Does Inflation Targeting Matter for Output Growth? Evidence from Industrial and Emerging Economies Mollick, André Varella Torres, René Cabral Carneiro, Francisco G. ACCOUNTING ASSETS BANK OPERATIONS BOND BUSINESS CYCLES BUSINESS ECONOMICS CAPITAL ACCOUNT CAPITAL ACCOUNT LIBERALIZATION CAPITAL ACCOUNT OPENNESS CAPITAL ACCUMULATION CAPITAL FLOWS CAPITAL GOODS CAPITAL INFLOWS CENTRAL BANK CENTRAL BANKS COLLATERAL CONTROL VARIABLES CORRELATION COEFFICIENT CORRELATION COEFFICIENTS COUNTRY ECONOMICS CREDIBILITY CURRENCY DEBT DEBT MATURITY DEBT STRUCTURE DEPENDENT VARIABLE DESCRIPTIVE STATISTICS DEVELOPING COUNTRIES DEVELOPING ECONOMIES DEVELOPMENT ECONOMICS DIRECT INVESTMENT DISINFLATION DOMESTIC SECURITIES DUMMY VARIABLE DUMMY VARIABLES ECONOMIC GROWTH ECONOMIC PERFORMANCE ECONOMIC RESEARCH EMERGING ECONOMIES EMERGING MARKET EMERGING MARKET ECONOMIES EMERGING MARKETS EMERGING MARKETS ECONOMIES EQUATIONS EQUIPMENT EQUITY FINANCING EQUITY MARKET ERROR TERM EXCHANGE RATE EXCHANGE RATE TARGETING EXCHANGE RATE VOLATILITY EXPLANATORY VARIABLE EXPLANATORY VARIABLES EXPORTS EXTERNAL ASSETS EXTERNAL POSITION FEDERAL RESERVE FEDERAL RESERVE BANK FINANCIAL CRISES FINANCIAL DEVELOPMENT FINANCIAL FLOWS FINANCIAL INSTITUTIONS FINANCIAL INTEGRATION FINANCIAL LIBERALIZATION FINANCIAL MARKETS FINANCIAL OPENNESS FINANCIAL SECTOR FINANCIAL SECTOR DEVELOPMENT FIXED EFFECTS FOREIGN ASSETS FOREIGN DIRECT INVESTORS FOREIGN INVESTORS GDP GDP PER CAPITA GLOBAL DISINFLATION GLOBALIZATION GROWTH RATE GROWTH RATES IMPORTS INCOME INCOME GROWTH INDUSTRIAL COUNTRIES INDUSTRIAL ECONOMIES INDUSTRIAL ECONOMY INFLATION INFLATION COMMITMENT INFLATION ENVIRONMENT INFLATION EXPECTATIONS INFLATION TARGETING INFLATION TARGETING REGIMES INFLATION TARGETS INSTRUMENTAL VARIABLES INTEREST PARITY INTEREST RATE INTEREST RATES INTERNATIONAL BANK INTERNATIONAL ECONOMICS INTERNATIONAL FINANCIAL INTEGRATION INTERNATIONAL FINANCIAL STATISTICS INTERNATIONAL MONEY INVESTMENT ASSETS INVESTMENT DECISIONS LIABILITY LIBERALIZATION LIBERALIZATIONS LOCAL FINANCIAL MARKETS LONG-TERM DEBT MACROECONOMICS MATURITY MATURITY STRUCTURE MONETARY ECONOMICS MONETARY POLICIES MONETARY POLICY MONETARY POLICY REGIMES MONETARY REGIMES MONOPOLIES NOMINAL INCOME OUTPUT OUTPUT GAP OUTPUT LOSSES OUTPUT PER CAPITA OUTPUT RATIO OUTPUT RATIOS PER CAPITA INCOME POLITICAL ECONOMY POPULATION GROWTH PORTFOLIO POSITIVE EFFECTS POTENTIAL OUTPUT PRICE STABILITY PUBLIC FINANCE REAL EXCHANGE RATE REAL GDP REGRESSION ANALYSIS RETURNS SECURITIES SERIAL CORRELATION STABLE INFLATION STOCHASTIC ERROR STOCK MARKET STOCKS SUM OF IMPORTS TRADE LIBERALIZATION TRADE OPENNESS TRADE UNIONS UNCERTAINTY WEALTH WORLD MARKET WORLD MARKET INTEGRATION This paper examines the effects of inflation targeting on industrial and emerging economies' output growth over the "globalization years" of 1986-2004. Controlling for trade openness and two indicators of financial globalization, the authors find systematic positive and significant effects of inflation targeting on real output growth. In dynamic models, the findings show strong output persistence in industrial economies, in which partial and full inflation targeting regimes have a positive long-run impact on growth. In emerging markets, only full inflation targeting policies have any output effect in the long-run. The results suggest that strict inflation targeting is needed to make the discipline effect of the disinflation process outweigh the output costs of promoting high interest rates to attract capital flows in a global world. These findings are robust to the treatment of endogenous globalization measures. 2012-05-21T22:22:58Z 2012-05-21T22:22:58Z 2008-12 http://documents.worldbank.org/curated/en/2008/12/10077499/inflation-targeting-matter-output-growth-evidence-industrial-emerging-economies http://hdl.handle.net/10986/6296 English Policy Research Working Paper; No. 4791 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank Washington, DC: World Bank Publications & Research :: Policy Research Working Paper Publications & Research |