Inflation Target Design, Changing Inflation Performance and Persistence in Industrial Countries

This paper examines the persistence of inflation in inflation and non-inflation targeting countries. It is shown empirically that inflation persistence has fallen in inflation targeting countries relative to some non-inflation targeting countries. However, it is not possible to determine at present whether the institutional design of inflation targets and the autonomy of central banks with inflation targets can explain the change in inflation persistence, as opposed to the general disinflation in industrial countries