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Why did inflation targeting fail in Argentina?

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  • Cachanosky, Nicolás
  • Ferrelli Mazza, Federico Julián

Abstract

Argentina’s experience with inflation targeting started in 2016 and ended in 2018, lasting a total of only 25 months. In this paper, we study the reasons why this monetary regime failed in Argentina. We argue that the main reason for its failure was an internal inconsistency in how the central bank implemented inflation targeting, and a negative credibility shock accelerated that said inconsistency in December 2017.

Suggested Citation

  • Cachanosky, Nicolás & Ferrelli Mazza, Federico Julián, 2021. "Why did inflation targeting fail in Argentina?," The Quarterly Review of Economics and Finance, Elsevier, vol. 80(C), pages 102-116.
    • Handle: RePEc:eee:quaeco:v:80:y:2021:i:c:p:102-116
    DOI: 10.1016/j.qref.2021.01.014
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    References listed on IDEAS

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    Cited by:

    1. Christian P Pinshi, 2022. "Ciblage des prévisions d'inflation : Un nouveau cadre pour la politique monétaire ?," Working Papers hal-03548273, HAL.
    2. John H. Cochrane, 2022. "Fiscal Histories," Journal of Economic Perspectives, American Economic Association, vol. 36(4), pages 125-146, Fall.
    3. Eduardo Pol, 2023. "Organising Thinking about Disinflation Policy," Economic Papers, The Economic Society of Australia, vol. 42(1), pages 92-106, March.
    4. Jorge Eduardo Carrera & Gaspar Ezequiel Maciel & Esteban Emilio, 2021. "El rol de las Letras del Banco Central en los últimos 20 años de Política Monetaria Argentina," Asociación Argentina de Economía Política: Working Papers 4448, Asociación Argentina de Economía Política.
    5. PINSHI, Christian P., 2022. "Inflation-Forecast Targeting: A New Framework for Monetary Policy?," MPRA Paper 111709, University Library of Munich, Germany.
    6. Juan M. C. Larrosa & Victoria Giordano & Gonzalo R. Ramírez Muñoz de Toro & Juan I. Uriarte, 2022. "Marketing attributes in yogurt weekly pricing in Argentina," Journal of Revenue and Pricing Management, Palgrave Macmillan, vol. 21(3), pages 332-343, June.

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    More about this item

    Keywords

    Argentina; Inflation targeting; Central bank credibility; Expectations;
    All these keywords.

    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies

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