Title Settling the Inflation Targeting Debate : Lights From a Meta-Regression Analysis / by Hippolyte W. Balima, Eric G. Kilama, and René Tapsoba

Published Washington, D.C. : International Monetary Fund, [2017] ©2017

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Description 1 online resource (43 pages) Series IMF working paper, 1018-5941 ; WP/17/213 IMF working paper ; WP/17/213. Contents Cover -- Content -- Abstract -- I. Introduction -- II. Meta-Regression Analysis: Methodological Approach -- A. Publication Selection Bias and Genuine Effect -- B. Model Specification -- III. Meta-samples and moderator variables -- A. Database Construction -- B. Sources of Heterogeneity -- IV. Results -- A. Publication Selection Bias and Genuine Effect -- B. Drivers of Heterogeneity -- V. Conclusion -- References -- Tables -- 1. Publication Selection Bias and Genuine Effect Tests 2. Publication Selection Bias and Genuine Effect Tests: Published Estimates Only3. Drivers of Heterogeneity, using Mixed-Effect Estimator -- 4. Drivers of Heterogeneity, using Probit Regressions -- Figures -- 1. Inflation Targeting-related Empirical Studies Retained in our MRA -- 2. Funnel Graphs -- Appendices -- 1. Summary Statistics of Studies Included in each Meta-Group -- 2. Variables used in the Meta-Regressions -- 3. Collected Estimates by Year and Type of Publication -- 4. Funnel Graphs Summary Inflation targeting (IT) has gained much traction over the past two decades, becoming a framework of reference for the conduct of monetary policy. However, the debate about its very merits and macroeconomic consequences remains inconclusive. This paper digs deeper into the issue through a meta-regression analysis (MRA) of the existing literature, making it the first application of a MRA to the macroeconomic effects of IT adoption. Building on 8,059 estimated coefficients from a very broad sample of 113 studies, the paper finds that the empirical literature suffers from two types of publication bias. First, authors, editors and reviewers prefer results featuring beneficial effects of IT adoption on inflation volatility, real GDP growth and fiscal performances; second, they promote results with estimated coefficients that are significantly different from zero. However, after filtering out the publication biases, we still find meaningful (genuine) effects of IT in reducing inflation and real GDP growth volatility, but no significant genuine effects on inflation volatility and the level of real GDP growth. Interestingly, the results indicate that the impact of IT varies systematically across studies, depending on the sample structure and composition, the time coverage, the estimation techniques, country-specific factors, IT implementation parameters, and publication characteristics Notes Online resource; title from PDF title page (IMF eLibrary, viewed March 1, 2018) Subject Central Banks. All Countries. Central Banks And Their Policies. Inflation Targeting. Form Electronic book Author Kilama, Eric, author Tapsoba, René, author. International Monetary Fund. Fiscal Affairs Department, issuing body. ISBN 9781484324189 1484324188 1484320751 9781484320754

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