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Three decades of inflation targeting

Magda Ciżkowicz-Pękała, Witold Grostal, Joanna Niedźwiedzińska, Elżbieta Skrzeszewska-Paczek, Ewa Stawasz-Grabowska, Grzegorz Wesołowski and Piotr Żuk
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Magda Ciżkowicz-Pękała: Narodowy Bank Polski
Witold Grostal: Narodowy Bank Polski
Joanna Niedźwiedzińska: Narodowy Bank Polski
Elżbieta Skrzeszewska-Paczek: Narodowy Bank Polski
Ewa Stawasz-Grabowska: University of Lodz
Piotr Żuk: Narodowy Bank Polski

No 314, NBP Working Papers from Narodowy Bank Polski, Economic Research Department

Abstract: Over the last three decades, inflation targeting has become one of the most widespread monetary policy frameworks used in economies striving to conduct independent monetary policy. However, the recent global financial crisis provoked criticism of the way monetary policies had been conducted, including under an inflation targeting strategy, and called for some adjustments to the monetary policy regimes. Against this background, the report is aimed at showing that introducing changes to inflation targeting has been an ongoing process. This is illustrated by discussing the key modifications that have been applied to the inflation targeting framework over the last decades, as well as by pointing to some less commonly reviewed adjustments of the strategy as practiced by some central banks in the past. While quite a number of more recent studies on inflation targeting emphasise lessons learnt from the global financial crisis, this report looks at the full 30 years of experiences with the regime and covers rather diversified array of issues relevant for understanding the strategy, reaching also for more distant examples of its modifications. Importantly, the focus is put on strategic elements of the framework, and consequently the topics related to macroprudential policy and monetary policy instruments are discussed rather briefly.

Keywords: Monetary Policy; Central Banking; Policy Design (search for similar items in EconPapers)
JEL-codes: E31 E52 E58 E61 (search for similar items in EconPapers)
Pages: 241
Date: 2019
New Economics Papers: this item is included in nep-cba, nep-mac and nep-mon
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