The choice of monetary regimes in emerging market economies: inflation targeting versus its alternatives

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dc.contributor.authorStojanovikj, Martin
dc.contributor.authorPetrevski, Goran
dc.date.accessioned2025-02-25T11:29:29Z
dc.date.available2025-02-25T11:29:29Z
dc.date.issued2024-06
dc.date.updated2025-02-25T11:29:29Z
dc.description.abstractThis paper examines the macroeconomic, financial, and institutional factors that affect the adoption of inflation targeting vis-a-vis alternative monetary policy strategies for 44 emerging market economies during 1990–2017. We employ a multinomial logistic regression with inflation targeting and exchange rate pegs as treatment groups, and intermediary monetary strategies as the baseline group. The main findings from our study are as follows: higher average inflation is associated with lower probability of adopting inflation targeting; while both output growth and its volatility make the adoption of inflation targeting less likely. Concerning the effects of the control variables, financial sector development, central bank independence, greater exposure to capital flows, and the level of economic development are all associated with higher likelihood of adopting inflation targeting, whereas higher public debt, trade openness, and money growth have the opposite effect. Macroeconomic conditions seem to have different impact on the choice of inflation targeting and exchange rate pegs, whereas similar institutional conditions are conducive to the implementation of both regimes. Finally, the effects of macroeconomic and institutional conditions do not depend on the type of inflation targeting.en
dc.description.sponsorshipMartin Stojanovikj gratefully acknowledges the financial support from the Basque Government, Department of Education, Language Policy, and Culture (IT1429-22)en
dc.identifier.citationStojanovikj, M., & Petrevski, G. (2024). The choice of monetary regimes in emerging market economies: Inflation targeting versus its alternatives. International Review of Economics and Finance, 93, 237-260. https://doi.org/10.1016/J.IREF.2024.03.024
dc.identifier.doi10.1016/J.IREF.2024.03.024
dc.identifier.issn1059-0560
dc.identifier.urihttps://hdl.handle.net/20.500.14454/2372
dc.language.isoeng
dc.publisherElsevier Inc.
dc.rights© 2024 The Authors
dc.subject.otherEmerging market economies
dc.subject.otherExchange rate targeting
dc.subject.otherInflation targeting
dc.subject.otherMultinomial logit model
dc.titleThe choice of monetary regimes in emerging market economies: inflation targeting versus its alternativesen
dc.typejournal article
dcterms.accessRightsopen access
oaire.citation.endPage260
oaire.citation.startPage237
oaire.citation.titleInternational Review of Economics and Finance
oaire.citation.volume93
oaire.licenseConditionhttps://creativecommons.org/licenses/by-nc/4.0/
oaire.versionVoR
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