On Target? the International Experience with Achieving Inflation Targets

This paper examines the international experience with full-fledged inflation targeting monetary regimes. Stylized facts are brought together from a review of the institutional elements of inflation targeting frameworks, a comparison of actual and targeted inflation outcomes, and case studies of large inflation target misses. Inflation targets are missed about 40 percent of the time and often by substantial amounts and for prolonged periods, yet no country has dropped inflation targeting. The resilience of the inflation targeting regime is attributable to the flexibility of the framework, its high standards of transparency and accountability, and the lack of realistic alternatives.Inflation targeting;inflation, monetary policy, inflation target, central bank, inflation targeting framework, price stability, inflation performance, inflation targeting regime, foreign exchange, financial stability, national bank, inflation rates, monetary fund, inflation objective, measure of inflation, distribution of inflation, monetary regimes, inflation forecasts, annual inflation, monetary regime, inflation rate, lower inflation, monetary policies, monetary policy transparency, real interest rates, monetary policy decision, actual inflation, rate of inflation, experience of inflation, monetary institutions, foreign currency, average inflation, inflation-targeting, monetary economics, monetary stability, monetary frameworks, increase in inflation, monetary framework, monetary policy decisions, percent inflation, monetary targeting, money demand, real wages, monetary policy objectives, monetary processes, monetary policy instruments, rates of inflation, price level, reserve requirement, monetary control, fall in inflation, monetary policy regimes, average rate of inflation, monetary policy rules, monetary conditions, average inflation rate, inflationary pressures, reduction of inflation, monetary policy framework, monetary independence, central bank monetary policy, monetary authorities, higher rates of inflation, monetary policy implementation, inflation process, treasury securities, monetary policy strategy, monetary stance, forecasting inflation