Anna Samarina

Inflation targeting and inflation performance: a comparative analysis

This article examines how the impact of inflation targeting on inflation performance depends on the choice of country samples, adoption dates, time periods and methodological approaches. We apply two different estimation methods – difference-in-differences and propensity score matching – for our sample of 25 advanced and 59 emerging and developing countries over the period 1985 to 2011. Our findings suggest that distinguishing countries by economic development is crucial, as no effect of inflation targeting is found for advanced economies, whereas the results suggest a significant negative effect of inflation targeting on inflation in emerging and developing countries. The results are robust to the methodology used for the analysis.

Factors leading to inflation targeting - the impact of adoption

This article examines how the analysis of inflation targeting (IT) adoption is affected by allowing for a structural change after adoption, using panel probit models for 60 countries over the period 1985 to 2008. Our findings suggest that there is a structural change after IT adoption. Including the post-adoption period when estimating the factors of IT adoption leads to biased results when interested in the question as of what drives countries’ decision to adopt IT.

Central Bank Policies and Income and Wealth Inequality: A Survey

This paper takes stock of the literature on the relationship between central bank policies and inequality. A new paradigm which integrates sticky-prices, incomplete markets and heterogeneity among households is emerging, which allows to jointly study how inequality shapes macroeconomic aggregates and how macroeconomic shocks and policies affect inequality. While the new paradigm features multiple distributional channels of monetary policy, most empirical analyses analyse each potential channel of redistribution in isolation. Our review suggests that empirical research on the effect of conventional monetary policy on income and wealth inequality yields very mixed findings, although there seems to be a consensus that higher inflation, at least above some threshold, increases inequality. In contrast to common wisdom, the conclusions concerning the impact of unconventional monetary policies on income inequality are also not clear cut. This is so since these policies may reduce income inequality by stimulating economic activity, but may also increase inequality by boosting asset prices. Similarly, results concerning the impact of unconventional monetary policies on wealth inequality are rather mixed. The scant literature on the impact of macro-prudential policies on inequality finds evidence for redistributive effects, but in view of its limitations it may be too early to come to conclusions.