The objective of the paper is to analyse whether the use of Inflation Targeting (IT) has had an impact on the process of convergence of inflation rates between Latin American countries and the United States. The analysis is made using non-habitual convergence tests. Some implications arise from our analysis. First, IT countries have lower inflation than countries with different monetary strategies. Second, the disinflationary process has been widespread, taking place in Latin America later than in developed countries. Finally, countries with other monetary policy strategies have also reduced the levels and dispersion of their inflation rates.
Bibliographical noteFunding Information:
This work was supported by the Vice-Rectorate for Research of the UPV/EHU (Personal Investigador en Formación) and by the Basque Government (Consolidated Research Group GIC10/153). We thank the useful comments made by referees. The usual disclaimer applies.
Copyright 2014 Elsevier B.V., All rights reserved.
All Science Journal Classification (ASJC) codes
- Business and International Management
- Economics, Econometrics and Finance(all)