Inflation targeting refers to a formal strategy followed by many central banks wherein a target (or target range) for the inflation rate is announced and maintained/pursued via adjustments in the inflation rate (percent at annual rate) (2005) indonesiablue (1999) mexicogreen (2000) south africared the figure on the right shows the annual inflation rate for the period 1980-2012 for five advanced economies that adopted inflation targeting during the early 1990s. the individual countries and the year they adopted inflation targeting are displayed in the figure 140% 130% 120% 100% 90% 80% 70% 60% 50% 40% 30% 20% 1096 0% just looking at the graph, does inflation appear to behave differently after the adoption of inflation targeting?
a. the time frame is too brief to reach any conclusion
b. the graph presents inconclusive evidence regarding the impact of inflation targeting
c. yes, the period after the early 1990s shows lower and more stable inflation
d. no, inflation is still present after the early 1990s
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Inflation targeting refers to a formal strategy followed by many central banks wherein a target (or...
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