Inflation Targeting – Between Theory And Reality

The paper provides an analysis of the general inflation targeting framework and its implications on macroeconomic performance improvement. Usually, the strategies are similar across countries, but specific conditions related to financial system stability, bank independence, transparency or credibility may differ from country to country, despite their level of development. It also examines whether certain conditions have to be met before emerging countries pass to this regime of monetary policy and brings different evidence to these requirements. We then examine some of industrialized and emerging economies that have been assessed to prove to what extent the inflation targeting decision contributed to a successful functioning market economy.