This study investigates the implications of financial dollarization for inflation
targeting framework. To this end, monetary policy rule, inflation targeting
performance and international reserves equations are estimated for twenty four
inflation targeting countries with different levels of financial dollarization. The
results based on the panel data estimations indicate that monetary policy rule and
behavior of accumulating international reserves are affected by the degree of
financial dollarization. Furthermore, the study finds that inflation targeting
performance is not affected by the level of financial dollarization. Consequently,
the empirical analysis suggests that even if financial dollarization does not affect
the inflation targeting performance, it does affect the monetary policy rule and
the variables to be taken into account to reach the target.
| Identifer | oai:union.ndltd.org:METU/oai:etd.lib.metu.edu.tr:http://etd.lib.metu.edu.tr/upload/3/12610058/index.pdf |
| Date | 01 September 2008 |
| Creators | Gokten, Selin |
| Contributors | Ozmen, Erdal |
| Publisher | METU |
| Source Sets | Middle East Technical Univ. |
| Language | English |
| Detected Language | English |
| Type | M.S. Thesis |
| Format | text/pdf |
| Rights | To liberate the content for public access |
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