{"id":1672,"date":"2023-02-13T16:19:19","date_gmt":"2023-02-13T16:19:19","guid":{"rendered":"https:\/\/www.fiw.ac.at\/publications\/an-overhaul-of-a-doctrine-has-inflation-targeting-opened-a-new-era-in-developing-country-peggers\/"},"modified":"2023-02-13T16:19:19","modified_gmt":"2023-02-13T16:19:19","slug":"an-overhaul-of-a-doctrine-has-inflation-targeting-opened-a-new-era-in-developing-country-peggers","status":"publish","type":"publication","link":"https:\/\/www.fiw.ac.at\/en\/publications\/an-overhaul-of-a-doctrine-has-inflation-targeting-opened-a-new-era-in-developing-country-peggers\/","title":{"rendered":"An Overhaul of a Doctrine: Has Inflation Targeting Opened a New Era in Developing-country Peggers?"},"content":{"rendered":"\nThe aim of this paper is to empirically examine the effect of a regime switch, from exchange-rate targeting (fixed exchange rate) to inflation targeting, on monetary policy in developing economies, hence adding to evidence on whether inflation targeting along with a managed float provides a better monetary policy compared to exchange-rate targeting. For this purpose, a group of developing countries that have historically experienced such a switch is analysed. This is done by an augmented interest-rate rule a-la Taylor (1993; 2001). Two methodological approaches are used: switching regression and Markov-switching method. Although both approaches have different drawbacks which compensate, still both lead to the conclusion that inflation targeting represented a real switch in developing countries. The period of inflation targeting was characterized by: a more stable economic environment; by more independent monetary-policy conduct; and by strict focus on inflation. Estimates suggest that the switch to a new monetary regime explains these results.\n\n","protected":false},"featured_media":0,"menu_order":0,"template":"","jelcode":[532,87],"keyword":[960,958,662,959],"class_list":["post-1672","publication","type-publication","status-publish","hentry","jelcode-e42","jelcode-f41","keyword-developing-economies","keyword-exchange-rate-targeting","keyword-inflation-targeting","keyword-monetary-regime-switch"],"acf":{"year":2010,"month":11,"day":"","volume":"","number":"057","pages":45,"reviewed":"0","citeid":"FIW_WP_057","fiwseries":"FIW Working Papers","event":null},"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v23.4 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>An Overhaul of a Doctrine: Has Inflation Targeting Opened a New Era in Developing-country Peggers? - FIW<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.fiw.ac.at\/en\/publications\/an-overhaul-of-a-doctrine-has-inflation-targeting-opened-a-new-era-in-developing-country-peggers\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"An Overhaul of a Doctrine: Has Inflation Targeting Opened a New Era in Developing-country Peggers? - FIW\" \/>\n<meta property=\"og:description\" content=\"The aim of this paper is to empirically examine the effect of a regime switch, from exchange-rate targeting (fixed exchange rate) to inflation targeting, on monetary policy in developing economies, hence adding to evidence on whether inflation targeting along with a managed float provides a better monetary policy compared to exchange-rate targeting. For this purpose, [&hellip;]\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.fiw.ac.at\/en\/publications\/an-overhaul-of-a-doctrine-has-inflation-targeting-opened-a-new-era-in-developing-country-peggers\/\" \/>\n<meta property=\"og:site_name\" content=\"FIW\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.fiw.ac.at\/wp-content\/uploads\/2023\/03\/wifo_fiw_logo_short_rgb.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"843\" \/>\n\t<meta property=\"og:image:height\" content=\"293\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:site\" content=\"@CentreFiw\" \/>\n<meta name=\"twitter:label1\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data1\" content=\"1 minute\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.fiw.ac.at\/en\/publications\/an-overhaul-of-a-doctrine-has-inflation-targeting-opened-a-new-era-in-developing-country-peggers\/\",\"url\":\"https:\/\/www.fiw.ac.at\/en\/publications\/an-overhaul-of-a-doctrine-has-inflation-targeting-opened-a-new-era-in-developing-country-peggers\/\",\"name\":\"An Overhaul of a Doctrine: Has Inflation Targeting Opened a New Era in Developing-country Peggers? - FIW\",\"isPartOf\":{\"@id\":\"https:\/\/www.fiw.ac.at\/en\/#website\"},\"datePublished\":\"2023-02-13T16:19:19+00:00\",\"dateModified\":\"2023-02-13T16:19:19+00:00\",\"breadcrumb\":{\"@id\":\"https:\/\/www.fiw.ac.at\/en\/publications\/an-overhaul-of-a-doctrine-has-inflation-targeting-opened-a-new-era-in-developing-country-peggers\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.fiw.ac.at\/en\/publications\/an-overhaul-of-a-doctrine-has-inflation-targeting-opened-a-new-era-in-developing-country-peggers\/\"]}]},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/www.fiw.ac.at\/en\/publications\/an-overhaul-of-a-doctrine-has-inflation-targeting-opened-a-new-era-in-developing-country-peggers\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Startseite\",\"item\":\"https:\/\/www.fiw.ac.at\/en\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Publications\",\"item\":\"https:\/\/www.fiw.ac.at\/en\/publications\/\"},{\"@type\":\"ListItem\",\"position\":3,\"name\":\"An Overhaul of a Doctrine: Has Inflation Targeting Opened a New Era in Developing-country Peggers?\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/www.fiw.ac.at\/en\/#website\",\"url\":\"https:\/\/www.fiw.ac.at\/en\/\",\"name\":\"FIW\",\"description\":\"\",\"publisher\":{\"@id\":\"https:\/\/www.fiw.ac.at\/en\/#organization\"},\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/www.fiw.ac.at\/en\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-US\"},{\"@type\":\"Organization\",\"@id\":\"https:\/\/www.fiw.ac.at\/en\/#organization\",\"name\":\"FIW\",\"url\":\"https:\/\/www.fiw.ac.at\/en\/\",\"logo\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.fiw.ac.at\/en\/#\/schema\/logo\/image\/\",\"url\":\"https:\/\/www.fiw.ac.at\/wp-content\/uploads\/2023\/03\/wifo_fiw_logo_kugel_rgb.png\",\"contentUrl\":\"https:\/\/www.fiw.ac.at\/wp-content\/uploads\/2023\/03\/wifo_fiw_logo_kugel_rgb.png\",\"width\":843,\"height\":843,\"caption\":\"FIW\"},\"image\":{\"@id\":\"https:\/\/www.fiw.ac.at\/en\/#\/schema\/logo\/image\/\"},\"sameAs\":[\"https:\/\/x.com\/CentreFiw\"]}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"An Overhaul of a Doctrine: Has Inflation Targeting Opened a New Era in Developing-country Peggers? - FIW","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/www.fiw.ac.at\/en\/publications\/an-overhaul-of-a-doctrine-has-inflation-targeting-opened-a-new-era-in-developing-country-peggers\/","og_locale":"en_US","og_type":"article","og_title":"An Overhaul of a Doctrine: Has Inflation Targeting Opened a New Era in Developing-country Peggers? - FIW","og_description":"The aim of this paper is to empirically examine the effect of a regime switch, from exchange-rate targeting (fixed exchange rate) to inflation targeting, on monetary policy in developing economies, hence adding to evidence on whether inflation targeting along with a managed float provides a better monetary policy compared to exchange-rate targeting. 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