Inflation targeting: a user's guide

As the fashionable way to make monetary policy over the last decade or so, inflation targeting has spread throughout the globe. Today there are 24 inflation targeters worldwide. Yet, as Edmund Phelps said in the previous issue of this journal, it is often not clear what it means to be an inflation targeter. Help is at hand here thanks to a recent paper from the International Monetary Fund (IMF).1 The authors of the paper say that there are three "pillars" in an effective inflation-targeting s