Does inflation targeting improve fiscal discipline?

Minea, Alexandru; Tapsoba, René

doi:10.1016/j.jimonfin.2013.10.002

Cited by 80 publications

(60 citation statements)

References 41 publications

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“…This is consistent with Minea and Tapsoba (2014) who found a significant impact of IT on fiscal discipline. This is consistent with Minea and Tapsoba (2014) who found a significant impact of IT on fiscal discipline.…”

Section: ] I N F L a T I O N T A R G E T I N G A N D F I S C A L supporting

confidence: 91%

“…(3) of (1a)supporting the existence of significant cross-effects. This is consistent with Minea and Tapsoba (2014) who found a significant impact of IT on fiscal discipline. The results also confirm the direct discipline-enhancing effect of FR on fiscal policy found in the literature (Alesina and Perotti, 1995;Alesina et al, 1999;Debrun et al, 2008b;Dabla-Norris et al, 2010;Gollwitzer, 2011;Tapsoba, 2012;Guerguil et al, 2017).…”

Section: ] I N F L a T I O N T A R G E T I N G A N D F I S C A L supporting

confidence: 91%

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Inflation Targeting, Fiscal Rules and the Policy Mix: Cross‐effects and Interactions

Combes

Debrun

Minea

et al. 2017

The Economic Journal

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International audienceWe examine how inflation targeting (IT) and fiscal rules (FR) affect inflation and fiscal performancein a large panel of countries during 1990–2009. In line with theory, both FR and IT appear to shapemonetary and fiscal outcomes. Significant cross-effects seem to exist as IT strengthens fiscalperformance, whereas the combination of FR and IT tends to be associated with more disciplinedmacroeconomic policies than if only one of these institutions operates. Our findings suggest that ITand FR affect the coordination of the policy mix, and point to potential benefits of reformingmacroeconomic frameworks in a holistic fashion

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Section: ] I N F L a T I O N T A R G E T I N G A N D F I S C A L supporting

confidence: 91%

Section: ] I N F L a T I O N T A R G E T I N G A N D F I S C A L supporting

confidence: 91%

Inflation Targeting, Fiscal Rules and the Policy Mix: Cross‐effects and Interactions

Combes

Debrun

Minea

et al. 2017

The Economic Journal

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“…We consider a sample of 48 advanced and emerging economies that have and have not adopted explicit IT between 1982 and 2016: Argentina, Australia*, Austria, Belgium, Brazil*,Canada*, Chile*, Colombia*, Costa Rica, Denmark, Finland*, France, Germany, Greece, Hong Kong, China, Hungary*, India, Indonesia*, Ireland, Israel*, Italy, Japan, Korea*, Latvia, Malaysia, Mexico*, Netherlands, New Zealand*, Norway*, Peru*, Philippines*, Poland*, Portugal, Romania*, Russia, Singapore, Slovak Republic*, Slovenia, South Africa*, Spain*, Sweden*, Switzerland*, Thailand*, Turkey*, The United Kingdom* and The United States. 10 Following Rose (2007), Minea and Tapsoba (2014) and Balima, Combes, and Minea (2017) we classify an observation as IT distinguishing between Full-fledge (FF henceforth) and Soft starting dates of IT. The difference between the two dates captures the fact that some central banks first adopted "soft or informal" IT (see Vega and Winkelried (2005)), in which the central bank's reaction, following a deviation of inflation from its targeted level, is slower compared to its reaction under an explicit "full-fledged or formal" IT.…”

Section: Data and Descriptive Statisticsmentioning

confidence: 99%

Does inflation targeting always matter for the ERPT? A robust approach

López-Villavicencio

Pourroy

2019

Journal of Macroeconomics

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This paper estimates the effects of different forms of inflation targeting (IT) in the exchange rate pass-through (ERPT). To this end, we first estimate the ERPT for a large sample of countries using state-space models. We then consider the adoption of an inflation targeting framework by a country as a treatment to find suitable counterfactuals to the actual targeters. By controlling for self-selection bias and endogeneity of the monetary policy regime, we confirm that the ERPT tends to be lower for countries adopting explicit IT. However, we uncover that older regimes, adopting a range or point with tolerance band and keeping inflation close to the target, outperform other IT regimes. We also show that IT is effective even with a relatively high inflation target or low central bank independence. JEL Classification: E31; E42; E52; C30.

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“…Following Minea and Tapsoba (2014), and Balima et al (2017), we consider the nearest (N = 1), the two-nearest (N = 2), and the three-nearest (N = 3). The second method is the radius or caliper matching (Dehejia and Wahba, 2002), which matches each treated i with untreated j that falls within radius r. We use the PS to define a medium (r = 0.1), a small (r = 0.05) and a wide (r = 0.2) radius.…”

Section: Propensity Score Matching Resultsmentioning

confidence: 99%

Informal Sector and Mobile Financial Services in Developing Countries: Does Financial Innovation Matter?

2019

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This paper investigates the impact of mobile financial services -MFS (mobile money, and mobile credit and savings) on the informal sector. Using both parametric and non-parametric methods on panel data from 101 emerging and developing countries over the period 2000-15, we find that MFS negatively affect the size of the informal sector. According to estimates derived from propensity score matching, MFS adoption decreases the informal sector size in a range of 2.4 -4.3 percentage points of GDP. These formalization effects may stem from different possible transmission channels: improvement in credit access, increase in the productivity/profitability of informal firms attenuating subsistence constraints typical of entrepreneurship in the informal sector, as well as possible induced growth of firms already in the formal sector. The robustness of these results is supported by the use of an alternative estimation approach (instrumental variables). These findings lay the groundwork for the scarce literature on the macroeconomic impact of mobile financial services, a major dimension of the growing drive towards economic digitalization.

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Does inflation targeting improve fiscal discipline?

Cited by 80 publications

References 41 publications

Inflation Targeting, Fiscal Rules and the Policy Mix: Cross‐effects and Interactions

Inflation Targeting, Fiscal Rules and the Policy Mix: Cross‐effects and Interactions

Does inflation targeting always matter for the ERPT? A robust approach

Informal Sector and Mobile Financial Services in Developing Countries: Does Financial Innovation Matter?

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