Working Paper: CEPR ID: DP7377
Authors: Robert P. Flood; Andrew K. Rose
Abstract: Inflation targeting seems to have a small but positive effect on the synchronization of business cycles; countries that target inflation seem to have cycles that move slightly more closely with foreign cycles. Thus the advent of inflation targeting does not explain the decoupling of global business cycles, for two reasons. Indeed business cycles have not in fact become less synchronized across countries.
Keywords: bilateral data; empirical; GDP; insulation; regime
JEL Codes: F42
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Inflation Targeting (E52) | Systematic Decline in Business Cycle Synchronization (F44) |
| Inflation Targeting (E52) | Synchronization of Business Cycles (F44) |
| Inflation Targeting (E52) | Business Cycle Synchronization (F44) |
| Inflation Targeting (E52) | Business Cycle Synchronization influenced by other Monetary Regimes (F42) |