Inflation Targeting. Institutional features of the strategy in practice

New Zealand was the first country to introduce a monetary strategy known as inflation targeting (IT) in 1989. Since then, many other countries have adopted an inflation targeting regime. The paper discusses in detail the key institutional features of an IT strategy, as practiced by central banks. It includes an overview of mandates, inflation targets, decisionmaking processes and accountability mechanisms of inflation targeters. Instead of only describing the current state of IT, in many instances the paper indicates changes introduced in the past years to central banks’ practices. The historical perspective relates to such aspects as reformulations of inflation targets and the evolution of decision-making processes. The paper analyses more than 40 IT central banks and indicates similarities and differences among advanced and emerging market economies. The main finding is that the reviewed institutional features have not been homogenous – neither across time, nor across central banks. In particular, when comparing advanced and emerging market inflation targeters, while in many aspects there is hardly any difference to be noted, in some cases the approach of advanced economies differs significantly from that of emerging market economies. This holds especially for the key feature of the strategy – namely defining the inflation target.