Revue internationale des sciences économiques et de gestion

Inflation Targeting: Previously Unexplored Experience and Implications in Advanced and Developing Economies

Abstract

Deysan Igor

Inflation targeting (IT) influences advanced and developing economies differently. Conducting graphical and econometric analysis the IT effectiveness in these two groups of countries was studied. Also the supposition about third-party factors that caused global disinflation was made. The article provides some explanation why some factors (institutional, economic and financial), distinguishing advanced and developing economies, reduce the effectiveness of the IT regime or even worsen some macroeconomic indicators due to IT implementation. Highlights • Slowdown of global inflation had begun before the IT was introduced by pioneer countries. • Advanced economies achieved basically positive results from IT in terms of inflation. Developing economies mostly were not prepared – there were no impact on inflation. • Employment was harmed (!) in both country groups and particularly in developing economies.