Inflation dynamics and monetary responses in emerging economies

Tóm tắt

This study examines inflation dynamics and monetary policy responses in 20 emerging economies from 2000 to 2022, with a focus on two key questions: the primary drivers of inflation and the effectiveness of inflation-targeting frameworks. Using panel regression, difference-in-differences estimation, and interaction models, the analysis reveals that interest rate movements, exchange rate volatility, and external oil price shocks primarily drive inflation. Countries adopting inflation targeting experienced significantly lower inflation rates than non-targeting peers, particularly when institutional quality was strong. The findings underscore the importance of coordinated policy frameworks and credible institutions in stabilising inflation. This research contributes to the empirical understanding of how emerging markets can better manage inflation through evidence-based monetary reforms. By linking inflation control to institutional capacity, the study offers actionable insights for policymakers seeking resilient and adaptive frameworks in the face of external and structural challenges.