Has Adoption of Inflation Targeting Been Effective? Japanese Case

Abstract

<p><em>Inflation targeting has been adopted in many countries. The pros and cons of adopting this policy have been discussed in developing countries and in developed ones as the goal of this policy has been changing. For most developed economies, combating deflation has been a serious problem, so adopting inflation targeting for this overcoming deflation and recession is ongoing in many developed economies. This paper examines whether or not adoption of inflation targeting has been effective in Japan. Empirical results show that adoption of inflation targeting has promoted overcoming deflation, however, there are no clear results that other important macroeconomic variables have been related directly with this policy.</em></p><span style="font-family: 'Times New Roman','serif'; font-size: 11pt; mso-bidi-font-size: 10.0pt; mso-fareast-font-family: '?? ??'; mso-font-kerning: 1.0pt; mso-ansi-language: EN-US; mso-fareast-language: JA; mso-bidi-language: AR-SA;" lang="EN-US"><em><br /></em></span>

Macroeconomic performance of countries across monetary policy regimes from 2000 to 2017

“…is superior in terms of inflation stabilisation but neutral for economic growth. Similarly, Kurihara (2018) detects no clear association between I.T. and economic growth.…”