Factors Leading to Inflation Targeting – The Impact of Adoption

KOF Working Papers No. 346

15 Pages Posted: 29 Nov 2013

See all articles by Anna SamarIna

Anna SamarIna

De Nederlandsche Bank

Jan-Egbert Sturm

KOF Swiss Economic Institute, ETH Zurich; CESifo (Center for Economic Studies and Ifo Institute)

Date Written: November 28, 2013

Abstract

This paper examines how the analysis of inflation targeting (IT) adoption is affected by allowing for a structural change after adoption, using panel probit models for 60 countries over the period 1985-2008. Our findings suggest that there is a structural change after IT adoption. Including the post-adoption period when estimating the factors of IT adoption leads to biased results when interested in the question as of what drives countries’ decision to adopt IT.

Keywords: inflation targeting, panel probit

JEL Classification: E42, E52

Suggested Citation

SamarIna, Anna and Sturm, Jan-Egbert, Factors Leading to Inflation Targeting – The Impact of Adoption (November 28, 2013). KOF Working Papers No. 346. Available at SSRN: https://ssrn.com/abstract=2361009 or http://dx.doi.org/10.2139/ssrn.2361009

Anna SamarIna

De Nederlandsche Bank ( email )

PO Box 98
1000 AB Amsterdam
Amsterdam, 1000 AB
Netherlands

Jan-Egbert Sturm (Contact Author)

KOF Swiss Economic Institute, ETH Zurich ( email )

Zurich
Switzerland

HOME PAGE: http://www.kof.ethz.ch

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, 81679
Germany

HOME PAGE: http://www.cesifo.de

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