Some evidence on policy makers' motives, macroeconomic performance and output-inflation trade-offs

This paper presents the results of an empirical study of the relationship between macroeconomic performance and policy makers' preferences for real output growth and inflation based on quarterly data from 16 countries. The empirical results indicate that a lower priority to inflation and a higher real output growth target lead to higher inflation and a less favourable real output-inflation trade-off, without affecting real output growth.