Resumo em Inglês:

A number of countries have adopted Inflation Targeting (IT) since the early 1990s in an attempt to reduce inflation to low levels. Since then, IT has been praised by most literature as a superior framework of monetary policy. We suggest that IT is a major policy prescription closely associated with the New Consensus Macroeconomics (NCM). This paper concentrates mainly on the IT aspects of the NCM. We address the theoretical foundations of IT. This is followed by an assessment of its theoretical foundations, where a number of aspects are discussed. We then turn our attention to an assessment of the empirical work on IT, where we distinguish the work that has been done utilising structural macroeconomic models, and work based in single equation techniques. The IT theoretical framework and the available empirical evidence do not appear to support the views of the proponents.

Resumo em Inglês:

It has long been known that, because of aggregation problems and the Cambridge Capital Theory Controversies, the aggregate production function cannot theoretically exist. Nevertheless, the concept is still widely and uncritically used, presumably because it gives good statistical fits to the data with plausible results. It is shown that this occurs because of the existence of an underlying accounting identity. A suitable mathematical transformation of this identity ensures that it is always possible to specify an "aggregate production function" where the putative output elasticities equal the factor shares, even though the aggregate production does not exist. This is illustrated by reference to a simulation exercise by Felipe and McCombie (2006) and a study by Oulton and O'Mahony (1994). The latter reject the hypothesis that capital is "special", in that their regression estimates demonstrate that the "output elasticity" of capital does not significantly differ from its factor share. However, it is shown in this paper why the data could not have given any other result.