info:eu-repo/semantics/workingPaper
A new test for the success of inflation targeting
Fecha
2003Autor
Powell, Andrew
Cohen Sabbán, Verónica
González-Rozada, Martín
Institución
Resumen
We propose a new test, derived from a set of variance decompositions of a structural VAR, for the success of inflation targeting. In contrast to standard sacrifice ratios this test considers changes in the structure of real and nominal shocks; second moment effects. We find strong support for IT with 7 of the 9 countries in our sample having negative “sacrifices” and many countries with “benefits”. However, we also find very different performances across IT countries.