The choice of inflation targeting

• Main Author: Leyva Jiménez, Gustavo A.
• Other Authors: Schmidt-Hebbel, Klaus
• Language: en
• Published: Universidad de Chile 2017
• Subjects: Inflación; Economía
• Online Access: http://repositorio.uchile.cl/handle/2250/144764

Tesis para optar al título de Magíster en Economía === This paper assesses empirically the contribution of key macroeconomic and institutional variables in shaping the likelihood of choosing the In°ation Targeting (IT) regime in a sample that comprises countries working under such a regime and covers the period 1975- 2005. I ¯nd in°ation rate, ¯nancial development, GDP per capita and trade openness relevant for driving the choice of IT by estimating a discrete choice panel data model. Also, my results suggest that the initial conditions at the moment of IT adoption do matter because countries have di®erent exposure to the likelihood of choosing IT as a result of their speci¯c macroeconomic and institutional fundamentals and unobservable idiosyncratic factors.