Evaluating the performance of inflation targeting regime in three   Asian economies

Sek Siok KUN

Article Details

Evaluating the performance of inflation targeting regime in three Asian economies

Authors:

Sek Siok KUN

Publisher:

Econometric Research Association

Main Topics:

Sociology and anthropology | Management

Journal:

International Econometric Review 2012 Vol.4 Issue 2, pp.82-98

Document Type:

Article

Publication Date:

8/2012

Document Language:

Turkish

Document ID (Org No.):

2000717704

Frequency:

Quarterly

eISSN:

1308-8815

pISSN:

1308-8793

Abstract:

 

We conduct empirical analysis in evaluating the performance of inflation targeting (IT) in three emerging East-Asian economies that have implemented this regime.   These three economies are Korea, Philippines and Thailand. The performance of inflation targeting regime is evaluated by comparing the economic achievement and structure changed   between the pre- and post- IT periods. In particular, evaluation is focused on the inter-relationship between inflation and output growth / gap in these emerging economies between   the pre- and post-IT periods. The inflation rate and the change in the macroeconomic variables are observed through country specific data. A bivariate GARCH (1,1) model is applied   to study the inter-relationship between inflation and output gap. The results also enable us to detect if IT regime induces disinflation cost by causing lower growth or higher   output gap. We compare the results of GARCH with the results of structural VAR for robustness checking. Both analyses provide consistent results. We observe lower inflation rate in   the post-IT period. However, there is no significant correlation between inflation and output gap and we find no evidence that lower inflation causes lower growth or higher output    gap. Both output gap and inflation are determined mainly by their own impulses. Besides, output gap is more persistent than inflation. We conclude that IT regime has improved the    economies of these countries.

Article Details

Evaluating the performance of inflation targeting regime in three Asian economies

Authors: Sek Siok KUN

Publisher: Econometric Research Association

Main Topics: Sociology and anthropology | Management

Journal: International Econometric Review 2012 Vol.4 Issue 2, pp.82-98

Document Type: Article

Publication Date: 8/2012

Document Language: Turkish

Document ID (Org No.): 2000717704

Frequency: Quarterly

eISSN: 1308-8815

pISSN: 1308-8793

Issues

Authors:

Sek Siok KUN

Publisher:

Econometric Research Association

Main Topics:

Sociology and anthropology | Management

Journal:

International Econometric Review 2012 Vol.4 Issue 2, pp.82-98

Document Type:

Article

Publication Date:

8/2012

Document Language:

Turkish

Document ID (Org No.):

2000717704

Frequency:

Quarterly

eISSN:

1308-8815

pISSN:

1308-8793