Inflation targeting: Genuine effects or publication selection bias?

Balima, Hippolyte; Kilama, Eric Gabin; Tapsoba, René

doi:10.1016/j.euroecorev.2020.103520

Cited by 18 publications

(13 citation statements)

References 47 publications

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“…However, central banks and IFIs could nevertheless benefit from looking at the evidence on IT with a more critical eye, given the dangers of groupthink at these institutions as highlighted in some quarters (Staff, 2011). This is particularly important given the findings of (Balima et al, 2017) and (Balima et al, 2020) who carry out a meta-analysis of the effects of IT using a data set of 8,059 estimated coefficients from a sample of 113 studies. They find that the empirical literature suffers from publication biases because "authors, editors and reviewers prefer results featuring beneficial effects of IT adoption" and "they promote results with estimated coefficients that are significantly different from zero".…”

Section: Discussionmentioning

confidence: 99%

Macro Effects of Formal Adoption of Inflation Targeting

Bhalla¹,

Bhasin²,

Loungani³

2023

IMF Working Papers

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Section: Discussionmentioning

confidence: 99%

Macro Effects of Formal Adoption of Inflation Targeting

Bhalla¹,

Bhasin²,

Loungani³

2023

IMF Working Papers

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“…Against conventional wisdom, the transmission lag is longer in more advanced economies, which can largely be attributed to higher financial development providing stronger buffers against surprise shocks in monetary policy. Balima et al (2020) consider a substantial subfield of the literature that compares the performance of competing central bank strategies, in particular that of inflation targeting. With over 8,000 point estimates from 113 studies, they conducted one of the largest meta-datasets so far.…”

Section: Monetary Policymentioning

confidence: 99%

Reconsidering macroeconomic policy prescriptions with meta-analysis

Gechert

2022

Industrial and Corporate Change

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This paper investigates recent developments in meta-analysis, the tool to quantitatively synthesize research in a certain body of literature. After providing a brief overview on how to do a meta-analysis and discussing recent methodological advancements, I review applied contributions to the field of macroeconomics. It turns out that meta-analyses have often questioned the conventional wisdom and established new consensuses in fiscal, monetary, and labor market policies by uncovering substantial publication bias and unexpected determining factors in many bodies of literature—in particular those dominated by policy conclusions in the neoclassical tradition like minimum wages, central bank strategies, financial regulation and the relative effects of tax and spending policies.

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“…IT has even been associated with improved macroeconomic performance and lower vulnerability to crisis relative to other monetary policy regimes (IMF, 2006). Moreover, using a meta-regression analysis based on 8059 estimated coefficients from 113 studies, Balima et al (2020) find IT to be correlated with lower inflation even after controlling for publication selection bias.…”

Section: Introductionmentioning

confidence: 96%

Just Do IT? An Assessment of Inflation Targeting in a Global Comparative Case Study

Duncan¹,

Martínez‐García²,

Toledo³

2022

gwp

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This paper proposes new measures of the effectiveness of inflation targeting (IT) and evaluates its main drivers in a (large) sample of advanced economies (AEs) and emerging market and developing economies (EMDEs). Using synthetic control methods, we find that IT has heterogeneous effects on inflation across countries. The gains shifting the level of inflation (generally downwards) are modest and smaller in AEs than are those in EMDEs. All such gains are statistically significant in one out of three economies approximately. Second, statistically significant differences in keeping inflation close to target under IT (compared with estimated counterfactuals) can be detected more broadly in nearly half of the economies. Third, IT can be a source of economic resilience that helped cushion inflation fluctuations during the 2007-09 Global Financial Crisis with statistically significant gains mostly found among EMDEs (in two out of three of these economies). Finally, we find that IT effectiveness-measured by the dynamic treatment effect and the absolute deviations of both observed and synthetic inflation from target-is significantly correlated with indices of exchange rate stability and monetary policy independence, especially among EMDEs.

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Inflation targeting: Genuine effects or publication selection bias?

Cited by 18 publications

References 47 publications

Macro Effects of Formal Adoption of Inflation Targeting

Macro Effects of Formal Adoption of Inflation Targeting

Reconsidering macroeconomic policy prescriptions with meta-analysis

Just Do IT? An Assessment of Inflation Targeting in a Global Comparative Case Study

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