Adoption of inflation targeting and tax revenue performance in emerging market economies: An empirical investigation

Lucotte, Yannick

doi:10.1016/j.ecosys.2012.01.001

Cited by 62 publications

(49 citation statements)

References 57 publications

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“…In the first time, Minea and Villieu (2008) and Minea, Tapsoba and Villieu (2012) show that IT does produce an incentive for governments to improve institutional quality and this monetary strategy should encourage the government to reinforce its tax collection system and rationalize its public expenditures. Lucotte (2012) conducted an empirical analysis of 59 countries (40 non-inflation targeters and 19 are targeters) covering the 1980-2009 period and that using the method of propensity score matching. He concluded that on average, the adoption of IT, which involves strengthening the independence of the central bank and maintaining a low level of inflation, had a large and significant effect on the effort of tax revenue mobilization or collection.…”

Section: Introductionmentioning

confidence: 99%

“…

ABSTRACTSeveral studies including Minea, Tapsoba and Villieu (2012) and Lucotte (2012) claim that in emerging countries, the adoption of inflation targeting (IT) monetary policy and its discipline character allow intensifying their efforts to collect tax revenue and/or expenditure rationalization, and allows the reduction of their budget deficits (Kadria and Ben Aissa, 2014). But, the lag in the effect of monetary policy contains vital information for the policy evaluation (Fang and Miller, 2011).

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confidence: 99%

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Inflation targeting and public deficit in emerging countries: A time varying treatment effect approach

Kadria¹,

Aïssa²

2016

Economic Modelling

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Several studies including Minea, Tapsoba and Villieu (2012) and Lucotte (2012) claim that in emerging countries, the adoption of inflation targeting (IT) monetary policy and its discipline character allow intensifying their efforts to collect tax revenue and/or expenditure rationalization, and allows the reduction of their budget deficits (Kadria and Ben Aissa, 2014). But, the lag in the effect of monetary policy contains vital information for the policy evaluation (Fang and Miller, 2011). Hence, our contribution to the previous literature is then to evaluate the time varying treatment effect of the IT's adoption by emerging countries on their budgetary discipline in terms of reducing or mastering the public deficit. To do this, we used the propensity score matching approach in order to take account of this "lag effect" or from this effect throughout time. Our empirical analysis, conducted on a sample of 41 economies (20 IT and 21 non-IT economies) for the period from 1990 to 2010, shows that the lag in effect of IT on public deficit performance proves to be shorter and gradual for emerging countries that have adopted this monetary policy framework and our conclusions corroborate the literature disciplining effect of IT on fiscal policy.

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Section: Introductionmentioning

confidence: 99%

“…

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mentioning

confidence: 99%

Inflation targeting and public deficit in emerging countries: A time varying treatment effect approach

Kadria¹,

Aïssa²

2016

Economic Modelling

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“…Dans ce cas, la relation reste négative et significative au seuil usuel de 1 %, et la valeur du coefficient estimé associé à la variable binaire CI augmente fortement. Dans le même ordre d'idées, Pétursson (2009) Alors que les résultats issus des travaux de Mishkin et Schmidt-Hebbel (2007) et de Pétursson (2009) semblent confirmer les vertus du CI en termes de performances macroéconomiques des pays cibleurs, il convient, comme le souligne Lucotte (2012), de les interpréter avec beaucoup de circonspection, et ce, pour au moins deux raisons. La première tient à l'absence d'informations relatives à la pertinence des variables instrumentales utilisées alors que la seconde tient à la nature même de la spécification retenue pour l'équation d'instrumentation.…”

Section: Revue De La Littératureunclassified

Ciblage D’inflation Et Performance Macroéconomique : Nouvelle Approche, Nouvelle Réponse

Ftiti

Goux

Boukhatem

2020

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Tous droits réservés © HEC Montréal, 2019Ce document est protégé par la loi sur le droit d'auteur. L'utilisation des services d'Érudit (y compris la reproduction) est assujettie à sa politique d'utilisation que vous pouvez consulter en ligne. https://apropos.erudit.org/fr/usagers/politique-dutilisation/ Cet article est diffusé et préservé par Érudit.Érudit est un consortium interuniversitaire sans but lucratif composé de l

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“…Table 1 below presents the different countries and their sampling dates. Moreover, like (Levya, 2008;Lucotte, 2012), we retain two adoption periods of inflation targeting. These are partial adoption (IT_PA), and full-fledged adoption (IT_FF).…”

Section: Data and Descriptive Analysesmentioning

confidence: 99%

Revisiting the Nexus Between Inflation Targeting and the Build-Up of the Financial Imbalances

Bogari¹

2020

AEF

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The outbreak of the recent global financial crisis in 2007-2008 of the most developed economies, has spurred criticism that inflation targeting central banks may have neglected the build-up of financial imbalances. In other words the global financial and economic crisis highlights that central banks should be more effective in mastering financial instability, and should achieve an explicit goal of financial stability beyond their traditional emphasis on low inflation. In this paper, we aim to assess whether inflation targeting (IT) actually mattered as regards financial stability. Our empirical evidence has been conducted on a group of 41 emerging economies from which 20 economies adopt Inflation Targeting policy and 21 non Inflation Targeting economies as a group of control, over the period 2000-2017. To do this, we evaluate the time varying treatment effect of the IT's adoption on the banking system stability. Additionally using a variety of propensity score matching methods, we show that, on average inflation targeting has an insignificant effect on lowering banking system instability.

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Adoption of inflation targeting and tax revenue performance in emerging market economies: An empirical investigation

Cited by 62 publications

References 57 publications

Inflation targeting and public deficit in emerging countries: A time varying treatment effect approach

Inflation targeting and public deficit in emerging countries: A time varying treatment effect approach

Ciblage D’inflation Et Performance Macroéconomique : Nouvelle Approche, Nouvelle Réponse

Revisiting the Nexus Between Inflation Targeting and the Build-Up of the Financial Imbalances

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