Inflation Targeting and Business Cycle Synchronization
47 Pages Posted: 26 Aug 2009
Date Written: July 2009
Abstract
Inflation targeting seems to have a small but positive effect on the synchronization of business cycles; countries that target inflation seem to have cycles that move slightly more closely with foreign cycles. Thus the advent of inflation targeting does not explain the decoupling of global business cycles, for two reasons. Indeed business cycles have not in fact become less synchronized across countries.
Keywords: bilateral, data, empirical, GDP, insulation, regime
JEL Classification: F42
Suggested Citation: Suggested Citation
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