Series Models

The aim of this paper is to deal with the empirical aspects of the ‘new ’ monetary policy framework, known as Inflation Targeting. Applying Intervention Analysis to multivariate Structural Time Series models, new empirical evidence is produced in the case of a number of OECD countries,. These results demonstrate that although Inflation Targeting has gone hand-in hand with low inflation, the strategy was introduced well after inflation had begun its downward trend. But, then, Inflation Targeting ‘locks in ’ low inflation rates. The evidence produced in this paper suggests that non-IT central banks have also been successful on this score