Abstract
This article empirically investigates the impact of inflation targeting on inflation uncertainty. We implement PARCH and GARCH methodologies to model conditional variance of inflation. We also investigate the relationship between level and volatility of inflation to analyze the validity of the Friedman hypothesis for IT countries. We find that most of the inflation targeting countries have significantly lower inflation variances after inflation targeting. In most of the IT countries, the relationship is consistent with the Friedman hypothesis.
Original language | English |
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Pages (from-to) | 283-297 |
Number of pages | 15 |
Journal | Scottish Journal of Political Economy |
Volume | 59 |
Issue number | 3 |
DOIs | |
Publication status | Published - Jul 2012 |
Externally published | Yes |
ASJC Scopus subject areas
- Sociology and Political Science
- Economics and Econometrics