Inflation targeting as a shock absorber

• 成果类型: Article
• 署名作者: Fratzscher, Marcel; Grosse-Steffen, Christoph; Rieth, Malte
• 署名单位: Leibniz Association; DIW Berlin - Deutsches Institut fur Wirtschaftsforschung; European Central Bank; Bank of France
• 刊物名称: JOURNAL OF INTERNATIONAL ECONOMICS
• ISSN/ISSBN: 0022-1996
• DOI: 10.1016/j.jinteco.2020.103308
• 发表日期: 2020
• 关键词: Monetary policy; Central banks; inflation targeting; inflation; natural disasters

摘要

We study the characteristics of inflation targeting as a shock absorber, using quarterly data for a large panel of countries. To overcome an endogeneity problem between monetary regimes and the likelihood of crises, we propose to study large natural disasters. We find that inflation targeting improves macroeconomic performance following such exogenous shocks. It lowers inflation, raises output growth, and reduces inflation variability compared to alternative monetary regimes. This performance is mostly due to a different response of monetary policy and fiscal policy under inflation targeting. Finally, we show that only hard, but not soft, targeting reaps the rewards: deeds, not words, matter for successful monetary stabilization. (C) 2020 Elsevier B.V. All rights reserved.