Some theoretical and practical results of inflation targeting

Novák, Zsuzsanna

Keywords: inflation targeting, effectiveness, theory and practice, transition economies

The emergence of inflation targeting can be traced back to the 90’s when first countries started forming a new policy strategy aimed at price stabilisation with “real” inflation targeters using explicit numerical targets and some applying a similar strategy with implicit determinations. The monetary policy framework has been endowed with rich theoretical and practical content but an interesting real question remains unanswered: how recent appliers can cope with a number of unaccomplished tasks in model-building and implementation. It is the most exciting challenge for transition economies how to reconcile institutional changes with real and nominal convergence. The solution of this issue provides an ample field for research and economic policy debates.