Testing the Transparency Benefits of Inflation Targeting : Evidence from Private Sector Forecasts / Christopher Crowe.

Format:

Book

Government document

Author/Creator:

Crowe, Christopher.

Contributor:

International Monetary Fund. Research Department.

Series:

IMF Working Papers; Working Paper ; No. 2006/289

IMF Working Papers

Language:

English

Subjects (All):

Anti-inflationary policies--Econometric models.

Anti-inflationary policies.

Inflation (Finance)--Forecasting--Econometric models.

Inflation (Finance).

Physical Description:

1 online resource (31 p.)

Edition:

1st ed.

Place of Publication:

Washington, D.C. : International Monetary Fund, 2006.

Language Note:

English

Summary:

I test whether inflation targeting (IT) enhances transparency using inflation forecast data for 11 IT adoption countries. IT adoption promotes convergence in forecast errors, suggesting that it enhances transparency. This effect is robust to dropping observations, is strengthened by using instrumental variable estimation to eliminate mean-reversion, and is absent in placebo regressions (where IT adoption is shifted by a year). This result supports Morris and Shin's (2002) contention that better public information is most beneficial for forecasters with bad private information. However, it does not support their hypothesis that better public information could make private forecasts less accurate.

Contents:

""Contents""; ""I. Introduction""; ""II. Theoretical Framework""; ""III. Empirical Strategy and Results""; ""IV. Conclusions""; ""Appendix I. Comparative Statics in The Model of Morris and Shin (2002)""; ""Appendix II. Matching Algorithms""; ""REFERENCES""

Notes:

"December 2006."

Includes bibliographical references (p. 26-29).

Description based on print version record.

ISBN:

9786613820167

9781462378043

1462378048

9781452750132

1452750130

9781282391734

1282391739

9781451910025

1451910029

OCLC:

535146902