Adopción de metas de inflación y su impacto en las expectativas de inflación y volatilidad del crecimiento económico: evidencia empírica para Bolivia

Valdivia, Daney and Loayza, Lilian (2010): Adopción de metas de inflación y su impacto en las expectativas de inflación y volatilidad del crecimiento económico: evidencia empírica para Bolivia.

Abstract

Introduction of inflation targeting has global effects on dynamic of prices and economic growth. In case of a developing country with an increasing remonetization since 2007 – 2008 and modest growing later than 2009 it’s important to assess the adoption of a new regime and how it helps to both control inflation dynamics and expectations; and how it stabilize the business cycle of economic growth. In order to assess inflation targeting we use the methodology applied by Vega and Winkelried (2006). Results have shown that in case of the Bolivian economy the adoption of the regime is significant. In this sense, implementation of inflation targeting reduces monthly inflation expectations, -7.33% and its structural component in -1.02%. At the same time, the variance of output reduces -1.2%.

• Item Type: MPRA Paper
• English Title: Inflation targeting and its impact on the inflation expectations and economic growth volatility: an empirical assessment for Bolivia
• Language: Spanish
• Keywords: Inflation targeting, propensity score, economic growth
• Subjects: E - Macroeconomics and Monetary Economics > E3 - Prices, Business Fluctuations, and Cycles > E32 - Business Fluctuations ; Cycles; E - Macroeconomics and Monetary Economics > E4 - Money and Interest Rates > E42 - Monetary Systems ; Standards ; Regimes ; Government and the Monetary System ; Payment Systems; C - Mathematical and Quantitative Methods > C5 - Econometric Modeling > C52 - Model Evaluation, Validation, and Selection; E - Macroeconomics and Monetary Economics > E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit > E52 - Monetary Policy

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