ANALYSIS OF THE STABILITY OF INFLATION IN INFLATION TARGETING COUNTRIES VIA CONTROL CHARTS

Year 2010, Volume: 5 Issue: 1, 111 - 123, 01.06.2010

Okt.Eric Kehinde Ogunleye İsmail H. Genç Bilge Eriş Kim Heng Chen

Abstract

While inflation targeting (IT) has been adopted by a few countries as a monetary policy tool chiefly
for inflation fighting purposes, the debate relative to its effect on making a difference on actual inflation level of
the adopting country has been waging with no end in sight. A number of authors have attempted to address the
issue with usually qualitative means. In this paper, we analyze the stability of inflation levels before and after the
adoption of IT with the help of ‘control charts.’ Control charts tell us when and in what fashion processes deviate
from stability, allowing us to take timely and appropriate action to keep the process on course. Our findings
show that the instability in inflation levels has been reduced in the post adopted era.

Keywords

Inflation Targeting, Control Charts

ANALYSIS OF THE STABILITY OF INFLATION IN INFLATION TARGETING COUNTRIES VIA CONTROL CHARTS

Abstract

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Keywords

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