发展与新挑战

Federal Reserve Board, Washington, D.C.ISSN 1936-2854 (Print)ISSN 2767-3898 (Online) The Evolution of Inflation Targeting from the 1990s to 2020s:Developments and New Challenges Michael T. Kiley and Frederic S. Mishkin 2025-025 Please cite this paper as:Kiley, Michael T., and Frederic S. Mishkin (2025).“The Evolution of Inflation Targetingfrom the 1990s to 2020s:Developments and New Challenges,” Finance and EconomicsDiscussion Series 2025-025. Washington: Board of Governors of the Federal Reserve System,https://doi.org/10.17016/FEDS.2025.025. NOTE: Staff working papers in the Finance and Economics Discussion Series (FEDS) are preliminarymaterials circulated to stimulate discussion and critical comment.The analysis and conclusions set forthare those of the authors and do not indicate concurrence by other members of the research staff or theBoard of Governors. References in publications to the Finance and Economics Discussion Series (other thanacknowledgement) should be cleared with the author(s) to protect the tentative character of these papers. The Evolution of Inflation Targeting fromthe 1990s to 2020s: Developments and NewChallenges by Michael T. KileyBoard of Governors of the Federal Reserve SystemandFrederic S. MishkinGraduate School of Business, Columbia UniversityandNational Bureau of Economic Research Abstract Since the initial launch of inflation targeting in the early 1990s in New Zealand and a few othercountries, inflation targeting has become the predominant monetary policy strategy in largeadvanced and emerging market economies. Inflation targeting has been remarkably successful inanchoring inflation, likely owing to core elements of the framework across central banks. Itsreaction process, which adjusts the monetary policy stance to ensure the return of inflation totarget, allows it to flexibly incorporate a wide range of factors while limiting the discretionarybiases that can contribute to excessive inflation. The emphasis on communications about theinflation outlook promotes transparency and accountability. As a result, inflation targetingcentral banks have, on balance, managed well the large shocks associated with the GlobalFinancial Crisis and COVID. Even so, there are numerous challenges discussed in this paper thatare associated with calibration and communications of forward guidance, quantitativeeasing/tightening, and financial stability. KeywordsInflation targeting, monetary policy, central banking, financial stability, Prepared forThe Palgrave Handbook on Public Debt and Policy Mix,Eboue, Chicot,editor.The authors would like to thank Nadia Nasim for her research assistance. The views expressedhere are our own and are not necessarily those of the Board of Governors of the FederalReserve System, Columbia University, or the National Bureau of Economic Research.Disclosure of Mishkin’s outside compensated activities can be found on his website athttp://www0. gsb. columbia. edu/faculty/fmishkin/ 1. INTRODUCTION Inflation targeting is a monetary policy strategy that has five key elements:11) the publicannouncement by a central bank of medium-term numerical targets for inflation, such as 2percent, in order to tie down inflation expectations; 2) an institutional commitment to pricestability as the primary goal of monetary policy, to which other goals are subordinated; 3) aforward-looking, information inclusive strategy in which many variables, and not just monetaryaggregates or the exchange rate, are used for deciding the setting of policy instruments; 4)increased transparency of the monetary policy strategy through communication with the publicand the markets about the plans, objectives and decisions of the monetary authorities; and 5)increased accountability of the central bank for attaining its inflation objectives. Since inflation targeting was first adopted by the Reserve Bank of New Zealand in 1990,inflation targeting has become the standard policy approach used by central banks in advancedeconomies and large emerging market economies. Table 1 shows the evolution of monetarypolicy regimes across selected economies as of the end of 1993, 2007, and 2023.2Mostadvanced countries had either explicitly or implicitly adopted inflation targeting prior to theglobal financial crisis (GFC) that started in late 2007. The adoption of inflation targeting amonglarge emerging market economies has also been significant, albeit somewhat more gradual, andthe continued trend away from exchange rate management and toward inflation targeting amongemerging market economies after 2007 owes, in part, to the incorporation of some easternEuropean economies into the euro area. An important exception is India, which adopted inflationtargeting in 2016 at levels of economic development below that typical of other inflationtargeters. In this paper, we examine how inflation targeting developed and the challenges it facedover two periods: the initial phase from 1990 until the global financial crisis (GFC),