Some tests on the effects of inflation targeting in New Zealand, Canada, and the UK

There is no empirical evidence that inflation targeting has changed macroeconomic variables in the unrestricted VAR context. There are two possible interpretations for this result. One is that inflation targeting may truly have no significant impacts on macroeconomic variables. The alternative scenario might be that the number of parameters in our model is so large relative to the number of observations that our tests do not have enough power to reject the null hypothesis of no structural changes. Further statistical investigations are desirable as more data become available and alternative models are devised.  2000 Elsevier Science S.A. All rights reserved.