Gupta, Rangan2012-02-072012-02-072011Gupta, R 2011, 'Growth-effects of inflation targeting : the role of financial sector development', Annals of Economics and Finance, vol. 12, no. 1, pp. 65-87.1529-7373http://hdl.handle.net/2263/18025The paper develops a dynamic general equilibrium monetary endogenous growth model. The closed economy model is inhabited by consumers, firms, a Cournotian monopolistically competitive banking system, besides, an inflationtargeting monetary authority, and, in turn, analyzes the effect of a tight monetary (disinflationary) policy on growth. We show that the effect of a lower inflation target on growth is ambiguous, with the ultimate effect depending on the initial levels of growth and the individual bank size, besides, a whole host of structural parameters defining the preferences and the production structure of the economy.enAll rights of reproduction in any form reserved.Economic growthFinancial sector developmentInflation targetingInflation (Finance)Economic developmentArticle