Front Matter
  • 1 0000000404811396 Monetary Fund


Inflation distorts prices, erodes savings, discourages investment, stimulates capital flight, inhibits growth, and makes economic planning a nightmare. During the past decade, several advanced economies have taken a new approach to the age-old problem of controlling inflation through monetary policy known as "inflation targeting." This pamphlet explains the requirements of putting the new policy in place, the experience of the countries that have tried it, and whether it has applicability to developing countries.

©1998 International Monetary Fund

Production: IMF Graphics Section

Cover design: Massoud Etemadi

Typesetting: Victor Barcelona, Julio R. Prego

ISBN 9781557757616

ISSN 1020-5098

Published September 1998

Reprinted March 2000

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The Economic Issues series aims to make available to a broad readership of nonspecialists some of the economic research being produced on topical issues by IMF staff. The series draws mainly from IMF Working Papers, which are technical papers produced by IMF staff members and visiting scholars, as well as from policy-related research papers.

This Economic Issue draws on material originally contained in IMF Working Paper 97/35, “Inflation Targeting in Practice,” by Guy Debelle, and Working Paper 97/130, “The Scope for Inflation Targeting in Developing Countries,” by Paul R. Masson, Miguel A. Savastano, and Sunil Sharma. This version was prepared by David D. Driscoll. Readers may purchase the Working Papers ($7.00) from IMF Publication Services, or view them in full text on the IMF’s website (