The Impact of Inflation Targeting on Economic Growth in Non-Industrial Countries

Low inflation is the prime purpose of inflation targeting; but if low inflation gained at the cost of low output growth، then inflation targeting may not consider as a successful policy. Based on an adaptive dynamic model، this study investigates the impact of inflation targeting on the growth rate in non-industrial countries during 1985-2010. The research sample consists of 18 countries which have adopted inflation targeting and 26 non-inflation-targeting countries as a control group. LSDVC، a dynamic panel estimator، employed to estimate the research model. The results show that inflation targeting has no significant impact of on the economic growth rate.