Does inflation targeting reduce sovereign risk? Further evidence

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We examine whether adopting an inflation-targeting regime helps reduce sovereign risk premia in a sample of 64 advanced and developing countries for the period 1985–2012. We address the self-selection problem of policy adoption by applying a variety of propensity score matching methods. The results provide evidence that inflation targeting lowers sovereign risk.
Original languageEnglish
Pages (from-to)237-241
JournalFinance Research Letters
Issue numberAugust
Early online date23 Apr 2016
Publication statusPublished - Aug 2016

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