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Do preferences shape institutions? The case of inflation aversion and inflation targeting

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  • De Roux, Nicolás
  • Hofstetter, Marc

Abstract

We show that preferences, estimated with subjective measures of individual well-being, help to explain the adoption of certain types of institutions. In particular, we show that countries exhibiting greater inflation aversion are more likely to adopt the inflation targeting monetary regime.

Suggested Citation

  • De Roux, Nicolás & Hofstetter, Marc, 2014. "Do preferences shape institutions? The case of inflation aversion and inflation targeting," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 51(C), pages 68-78.
    • Handle: RePEc:eee:soceco:v:51:y:2014:i:c:p:68-78
    DOI: 10.1016/j.socec.2014.03.005
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    Cited by:

    1. Marc Hofstetter & José Nicolás Rosas, 2021. "The Poor and the Rich: Preferences over Inflation and Unemployment," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 53(4), pages 875-895, June.
    2. Nebioğlu, Deniz & Soybilgen, Barış, 2023. "Inflation aversion in Turkey," Economic Systems, Elsevier, vol. 47(4).

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    More about this item

    Keywords

    Subjective well being; Preferences; Inflation targeting; Monetary regimes;
    All these keywords.

    JEL classification:

    • D02 - Microeconomics - - General - - - Institutions: Design, Formation, Operations, and Impact
    • D70 - Microeconomics - - Analysis of Collective Decision-Making - - - General
    • E02 - Macroeconomics and Monetary Economics - - General - - - Institutions and the Macroeconomy
    • 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
    • E61 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Policy Objectives; Policy Designs and Consistency; Policy Coordination

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