Effectiveness of Inflation Targeting Strategy in Times of Financial Instability in Emerging Countries
Souhila Bouhmidi
University of Oran 2 Mohamed ben Ahmed , AlgeriaHamza Fekir
University of Oran 2 Mohamed ben Ahmed , AlgeriaIsmail Amani
University of Oran 2 Mohamed ben Ahmed , Algeriahttps://orcid.org/0000-0002-9845-5091
Abstract
This paper aims to assess the effectiveness of inflation targeting policy in emerging economies during an economic crisis, particularly the 2007 financial and economic crisis. Thus, considering pre-crisis and crisis periods, an econometric model based on the difference-in-differences method (DID) was adopted. The sample consists of twelve inflation-targeting countries, the test group, and twelve non-targeting countries, the control group. The model was estimated using the EGLS method on panel data. The results show that inflation-targeting emerging countries have less control over prices during crisis than emerging countries without inflation-targeting policy.
Keywords:
inflation targeting, economic crises, difference in difference, panel data, emerging countryReferences
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University of Oran 2 Mohamed ben Ahmed
University of Oran 2 Mohamed ben Ahmed
University of Oran 2 Mohamed ben Ahmed https://orcid.org/0000-0002-9845-5091
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This work is licensed under a Creative Commons Attribution 4.0 International License.
This work is licensed under a Creative Commons Attribution 4.0 International License.
