NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

One Decade of Inflation Targeting in the World: What Do We Know and What Do We Need to Know?

Frederic S. Mishkin, Klaus Schmidt-Hebbel

NBER Working Paper No. 8397
Issued in July 2001
NBER Program(s):Monetary Economics

One decade of inflation targeting in the world offers lessons on the design and implementation of inflation targeting, the conduct of monetary policy, and country performance under inflation targeting. This paper reviews briefly the main design features of 18 inflation targeting experiences, analyzes statistically if countries under inflation targeting are structurally different from non-inflation targeting industrial countries, and reviews existing evidence about the success of inflation targeting. The interaction of inflation targeting design features and the conduct of monetary policy during transition to low inflation are tackled next. The paper ends by focusing on unresolved issues on design and implementation of inflation targeting and their relation to the conduct of monetary policy open issues that have to be addressed in the next decade of inflation targeting.

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Document Object Identifier (DOI): 10.3386/w8397

Published: Loayza, Norman and Raimundo Soto (eds.) Inflation Targeting: Design, Performance, Challenges. Santiago: Central Bank of Chile, 2002.

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