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How are inflation targets set?
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SYSNO ASEP 0353573 Document Type J - Journal Article R&D Document Type Journal Article Subsidiary J Ostatní články Title How are inflation targets set? Author(s) Horváth, R. (CZ)
Matějů, Jakub (NHU-C) RIDSource Title CERGE-EI Working Paper Series - ISSN 1211-3298
-, č. 426 (2010), s. 1-35Number of pages 35 s. Publication form www - www Language eng - English Country CZ - Czech Republic Keywords inflation targeting ; central bank ; credibility Subject RIV AH - Economics CEZ MSM0021620846 - NHU-C Annotation This paper aims to contribute to a better understanding on how inflation targets are set. For this reason, we first gather evidence from official central bank and government publications and from a questionnaire sent to central banks on how inflation targets are set; we then estimate the determinants of the level of inflation target in 19 inflation targeting countries using unbalanced panel interval regressions (to deal with the issue that targets are typically set as a range rather than as a point). Inflation targets are found to reflect macroeconomic fundamentals. Higher level as well as higher variability of inflation are associated with higher target. The setting of the inflation target is also found to have an important international dimension, as higher world inflation is positively correlated with inflation targets. Rapidly growing countries exhibit higher inflation targets. Workplace Economics Institute - CERGE Contact Tomáš Pavela, pavela@cerge-ei.cz, Tel.: 224 005 122 Year of Publishing 2011
Number of the records: 1