RICARDO D. BRITO Inflation Targeting Does Not Matter: Another Look at OECD Sacrifice Ratios Recently in this journal, Gonc ¸alves and Carvalho (2009) concluded that inflation targeters were able to bring inflation down at less cost than non- targeters (p. 242). This comment shows that their conclusion is not robust but instead is the result of comparing a particular subset of inflation tar- geting (IT) disinflations with nonsimultaneous disinflations that occurred under very different macroeconomic conditions. In their sample, simple ex- tensions such as justifiably varying the treatment group of IT disinflations, to control for common time-varying effects or to control for the Maastricht Treaty effects, suggest that IT does not matter. JEL codes: E42, E52 Keywords: inflation targeting, sacrifice ratio. IN A RECENT paper in this journal, Gonc ¸alves and Carvalho (2009, denominated GC hereafter) compared four inflation targeting (IT) disinfla- tions selected ad hoc from a broader set of OECD disinflations and concluded that “inflation targeters suffered smaller output losses during disinflations when compared to nontargeters” (p. 233). In this comment, I argue that their conclusion is a result of the peculiar subset of disinflations they label as IT and of comparing them to costly disinflations that happened years earlier under different economic conditions. I show that IT does not matter for an expanded, more historically grounded, subset of IT disinflations (i.e., for a more representative treatment group), nor does it matter for GC’s specific IT subset if controlled for differences in common economic conditions before and after the mid-90s (i.e., with controls for common time-varying effects). Conformation to the Maastricht Treaty shows much more economic and statistical importance than the IT policy; at the same time, the latter efficiency is retrenched by the control for the former big costs (i.e., with controls for observables). When I I thank Eurilton Ara´ ujo, Cyntia Azevedo, Alexandre Carvalho, Vitorio Corbo, and Lucio Sarno for helpful discussions. All errors are only my responsibility. Financial support from the CNPq/Brazil under grant no. 200403/2007-9 is gratefully acknowledged. RICARDO D. BRITO is an Associate Professor, Department of Economics at Insper Institute, S˜ ao Paulo, Brazil (E-mail: RicardoDOB@insper.edu.br). Received February 24, 2010; and accepted in revised form March 18, 2010. Journal of Money, Credit and Banking, Vol. 42, No. 8 (December 2010) C  2010 The Ohio State University