The Impact of Inflation Targeting on Unemployment in Developing and Emerging Economies

Resumo

Several countries around the world have adopted the inflation targeting regime for monetary policy. Despite the growing literature on the issue, it is not clear whether developing and emerging countries can improve their economic performance by adopting inflation targeting. This working paper examines the extent to which macroeconomic policies anchored to inflation targeting affect unemployment, economic growth and the output gap. The results show that inflation targeting causes no harm to employment in developing and emerging countries. On the contrary, it might reduce average unemployment and narrow the output gap. Given that the change in regime must be accompanied by institutional and economic reforms to fiscal and exchange rate policies, targeters might be better off than non-targeters. Hence there is no apparent reason to condemn the adoption of the inflation targeting regime by developing and emerging countries. (...)

Ficha do documento

Tipo

Estudo

Ano

2009

Instituição

Instituto de Pesquisa Econômica Aplicada

Fonte

Repositório do Ipea

Idioma

Inglês

Acesso

Acesso aberto

Identificador

oai:repositorio.ipea.gov.br:11058/15816

Licença

Licença total exclusiva

Temas

Finanças Públicas

Palavras-chave

ImpactInflationUnemploymentDeveloping and Emerging Economies