International Journal of Research in Finance and Management
2020, Vol. 3, Issue 2
Inflation targeting policy between theory and practice
Inflation is considered a serious dilemma that affects economic activity as a whole. Many monetary policy makers have convinced that price stability should be the primary goal of monetary policy. Therefore, this study aims to shed light on inflation targeting policy as a new strategy for managing monetary policy. The number of countries that have adopted this policy has noticeably increased, which calls for the necessity to search for the reasons behind this, in addition to benefiting from the experiences of the countries that used them. The study found that most developing countries do not have the necessary conditions to implement the policy of targeting inflation and need to provide the appropriate climate and conditions to apply. This policy will ensure its success and benefit from it in addressing the problem of inflation.