Relationship between inflation targeting and global financial crisis: one night stand, break up or going exclusive?

Malović, Marko (2013) Relationship between inflation targeting and global financial crisis: one night stand, break up or going exclusive? In: Sciences on the Crossroad / International Scientific Conference on the Occasion of the 55th Anniversary ofthe IES. Institute of Economic Sciences, Belgrade, pp. 110-115. ISBN 978-86-89465-10-5

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Abstract

After reviewing the basic traits of inflation targeting monetary strategy, this short paper analysis the nature of the relationship between inflation targeting and international financial crisis. Once the global financial crisis broke out, many a voice started questioning the usefulness and viability of inflation targeting strategy in this new reality. While some of the criticism has been found justifiable, required alterations are neither so huge to discard the crucial effectiveness of flexible inflation targeting methodology and turn it into something completely different, nor any of the other known monetary strategies have had built in specs that would have enabled them to fare substantially better than inflation targeting in what it partially failed us through the global financial meltdown and subsequent recession.

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