Abstract

This study aims to examine whether emerging countries can use both an inflation targeting strategy and exchange rate regime targeting in order to improve their macroeconomic performance. Empirically, we are based on a sample of 28 emerging countries, over the period 1985-2000. Our findings yielded from mean comparisons tests reveal that in addition to the inflation targeting strategy, countries may adopt an exchange rate regime to improve their growth and decrease their inflation. Moreover, the use of interactive variables in panel models shows that the inflation targeting strategy is a complement to the flexible exchange-rate regime and a substitute for the fixed exchange rate regime.

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