Inflation targets, monetary policy and investment: a study for seventeen countries

Vol. 29 No. 3 (2009)

Jul-Sep / 2009
Published July 1, 2009
PDF-Portuguese (Português (Brasil))
PDF-Portuguese (Português (Brasil))

How to Cite

Pelicioni, Luis Alberto, and Marco Flávio da Cunha Resende. 2009. “Inflation Targets, Monetary Policy and Investment: A Study for Seventeen Countries”. Brazilian Journal of Political Economy 29 (3):71-92. https://centrodeeconomiapolitica.org.br/repojs/index.php/journal/article/view/487.
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Inflation targets, monetary policy and investment: a study for seventeen countries

Luis Alberto Pelicioni
Banco Central do Brasil
Marco Flávio da Cunha Resende
Cedeplar-UFMG e bolsista de produtividade do CNPq
Brazilian Journal of Political Economy, Vol. 29 No. 3 (2009), Jul-Sep / 2009, Pages 71-92

Abstract

In this paper two hypotheses about the relationship between monetary policy and investment in the context of the inflation target system were tested. One of these hypotheses is based on the idea of neutrality of money, and the other hypothesis is based on the reject of that idea. An investment equation for seventeen economies using a piece-wise dummy variable was estimated by the Methodology of Panel Data. The results highlight that a negative correlation between current expectation of restrictive monetary policy and current investment rose after the inflation target system implementation.

JEL Classification: E12; E13; E22;E52.


Keywords: inflation target monetary policy investment