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Measuring Disinflation Credibility in Emerging Markets: A Bayesian Approach with an Application to Turkey's IMF-Supported Program

Author

Listed:
  • Alessandro Rebucci

    (International Monetary Fund)

  • Marco Rossi

    (International Monetary Fund)

Abstract

This paper proposes a new empirical measure of disinflation credibility and applies it to the IMF-supported disinflation program in Turkey since the 2001 crisis. This measure relies only on the consumer price index and can thus be easily applied in countries in which asset prices and survey inflation expectations are not available or reliable. The application to Turkey's shows that it is less volatile and hence more reliable than a survey-expectation based measure.

Suggested Citation

  • Alessandro Rebucci & Marco Rossi, 2006. "Measuring Disinflation Credibility in Emerging Markets: A Bayesian Approach with an Application to Turkey's IMF-Supported Program," Economics Bulletin, AccessEcon, vol. 6(11), pages 1-8.
    • Handle: RePEc:ebl:ecbull:eb-06f20004
    as

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    References listed on IDEAS

    as
    1. Baxter, Marianne, 1985. "The role of expectations in stabilization policy," Journal of Monetary Economics, Elsevier, vol. 15(3), pages 343-362, May.
    2. Oya Celasun & R. Gaston Gelos & Alessandro Prati, 2004. "Obstacles to disinflation: what is the role of fiscal expectations? [‘Disinflation with imperfect credibility’]," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 19(40), pages 442-481.
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    More about this item

    JEL classification:

    • F2 - International Economics - - International Factor Movements and International Business
    • E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit

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