A BEJM Topics article.

Abstract

Several European countries adopted inflation targeting as a monetary policy strategy during the 1990s. This article evaluates the impact of the establishment of this policy framework on the dynamics of inflation for three countries: United Kingdom, Spain and Finland. While smaller shocks triggered most of the decline in their high frequency inflation volatility, this is not always the case for their low frequency (trend) counterpart. Our results suggest that, in the case of the United Kingdom, the more aggressive monetary policy stance against inflation during the inflation targeting period was instrumental in the decline in trend inflation volatility.

Submitted: May 2, 2006 · Accepted: June 22, 2006 · Published: August 30, 2006

Originally published in Topics in Macroeconomics.

Recommended Citation

Moreno, Antonio and Rey, Luis (2006) "Inflation Targeting in Western Europe," Topics in Macroeconomics: Vol. 6 : Iss. 2, Article 6.
Available at: http://www.bepress.com/bejm/topics/vol6/iss2/art6