Inflation targeting helps emerging economies control crisis-induced inflation spikes.
The article examines how inflation targeting affects economic performance in emerging market economies during times of crisis. The researchers used a method called difference-in-difference with fixed-model to analyze data from 54 countries, including 15 with inflation targeting, from 2002 to 2010. The study found that inflation targeting did not significantly impact inflation rates or GDP growth overall. However, it did show that emerging economies could better control inflation during crises without sacrificing economic growth.