Inflation targeting has become an increasingly popular monetary policy strategy, with some 21 countries (8 industrial and 13 emerging market) now inflation targeters. Other countries are considering following in their footsteps. Yet, while there have been numerous studies of inflation targeting in industrial countries, there has been little analysis of the effects of inflation targeting in emerging market countries. This chapter makes a first attempt to fill this void. It looks at the experience of the emerging market countries that have adopted inflation targeting since the late 1990s, focusing both on macroeconomic performance and the potential benefits and costs of adopting inflation targeting. A new and detailed survey of 31 central banks was conducted to support the analysis in the chapter. Particular attention is paid to the implications for institutional change and to the feasibility and success of inflation targeting when specific initial conditions, such as central bank independence, are initially absent.
展开▼
