Inflation Targeting in Practice: A Survey

Abstract

Since its first introduction in New Zealand in 1990, inflation targeting has been successfully adopted in several industrialized countries-Canada, the United Kingdom, Sweden, Finland, Australia in the early 1990s; and Iceland and Norway a decade later. More recently, several emerging market economies (Mexico, Israel, Chile, and Brazil among them) have tried to move in the same direction. I have performed a cross-country comparison of the application of inflation targeting framework. Reviewing case studies and empirical evidence from the past twenty years, I present and summarize the most recent results and practical issues experienced by the emerging market economies, as well as the necessary steps that should be considered to ensure a successful implementation.