Evaluating the Performance of Inflation Targeting on Asian Countries

By Michael C. M. Ng and Wai Chung Lo.

Published by The Social Sciences Collection

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Article: Print $US10.00
Article: Electronic $US5.00

In this paper, we examine the performance of inflation targeting of four Asian inflation targeters. In order to investigate the impact of inflation targeting framework, we construct the sacrifice ratio as a measurement for the cost of disinflation. We have the following findings. First, the unit cost of disinflation is lower for higher initial inflation level. Second, the unit cost of disinflation is higher if the length of the disinflation episode is longer. Third, the unit cost of disinflation with low magnitude is smaller. Lastly, inflation targeting framework does not change the previous three conclusions in the four Asian countries in our sample.

Keywords: Inflation Targeting, Disinflation, Trend Output, Sacrifice Ratio

International Journal of Interdisciplinary Social Sciences, Volume 3, Issue 3, pp.103-116. Article: Print (Spiral Bound). Article: Electronic (PDF File; 1.118MB).

Michael C. M. Ng

The Open University of Hong Kong, Hong Kong

Wai Chung Lo

Worcester State College, USA


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