Why Have so Many Disinflations Succeeded?

Abstract

Why is that the achievements of some disinflations from low and moderate peaks are longlived,
whereas in others the gains in the inflationary front dissipate quickly? Based on an index
of the sustainability of disinflations proposed in the paper, various competing explanations of
what determines sustainability are tested. Three factors, potentially at the top of the list of
many researchers, are shown to be insignificant: oil shocks, fiscal policy and inflation targeting.
Nevertheless, other important features such as the exchange rate regime, achieving a low inflation
rate during the disinflation and food price shocks are shown to be important variables driving the
sustainability records