Inflation targeting and its effects on the inflation: Albanian case

Transformation from a centrally planned economy to a market economy was accompanied by a number of reforms such as the efforts to fully liberalize prices and the creation of a two-level banking system. To achieve this goal there was the need to include the monetary policy as one of the main macroeconomic policies. The law on “the Bank of Albania” defined the competence of BoA to draft and implement the monetary policy by keeping the price stability as principal goal. There are several monetary policies strategies or regimen to achieve the prices stability such as: targeting of the monetary mass, targeting of the inflation, and monetary policy with implicit nominal anchor. The analysis will focus on the Inflation Targeting regimen, its progress over the years starting from the period when it began to be applied and the effects of this regimen to the inflation before and after the economy crisis