Global diffusion, policy flexibility, and inflation targeting

Wasserfallen, Fabio (2019). Global diffusion, policy flexibility, and inflation targeting. International interactions, 45(4), pp. 617-637. Taylor & Francis 10.1080/03050629.2019.1614573

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A diverse group of over 30 countries located all over the world—such as the UK, Colombia, and Ghana—introduced inflation targeting, which is a monetary policy that seeks to control inflation through a pre-announced target. Fully institutionalized democracies adopted the policy first because the core features of inflation targeting are consistent with the principles of a liberal democracy. But why was inflation targeting also introduced by less-democratic countries? This article develops the argument that decision makers of less-democratic countries became more likely to adopt inflation targeting when they observed that nearby countries increased the flexibility of the policy. The statistical analysis of data from 76 countries between 1989 and 2013 supports this hypothesis. The finding that the change of a policy toward a more flexible framework drives its global spread addresses a blind spot in the more recent policy diffusion literature.

Item Type:

Journal Article (Original Article)

Division/Institute:

03 Faculty of Business, Economics and Social Sciences > Social Sciences > Institute of Political Science

UniBE Contributor:

Wasserfallen, Fabio Adriano

Subjects:

300 Social sciences, sociology & anthropology > 320 Political science

ISSN:

0305-0629

Publisher:

Taylor & Francis

Language:

English

Submitter:

Mirco Thomas Good

Date Deposited:

24 Apr 2020 17:31

Last Modified:

24 Apr 2020 17:40

Publisher DOI:

10.1080/03050629.2019.1614573

Uncontrolled Keywords:

Policy diffusion, inflation targeting, policy flexibility, decoupling, democracy, central banking

BORIS DOI:

10.7892/boris.141498

URI:

https://boris.unibe.ch/id/eprint/141498

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