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Moving targets? Inflation targeting frameworks,1990–2025

Author

Listed:
  • Claudio Borio
  • Matthieu Chavaz

Abstract

Recent and upcoming reviews of monetary policy frameworks have been putting the spotlight on the evolution of inflation targeting. This article provides context by using a new database of changes to the inflation targeting frameworks of 26 central banks since 1990. We use the data to track changes in the frameworks' flexibility in terms of the specification of the inflation target and the role of other objectives, ie employment (or output) and financial stability. While the specification of the numerical targets has become stricter (eg points rather than ranges), greater flexibility has taken the form of less strict / longer horizons to achieve them and more weight on other objectives, especially employment/output. These trends are typically more pronounced in advanced economies and have widened differences with their emerging market peers.

Suggested Citation

  • Claudio Borio & Matthieu Chavaz, 2025. "Moving targets? Inflation targeting frameworks,1990–2025," BIS Quarterly Review, Bank for International Settlements, March.
    • Handle: RePEc:bis:bisqtr:2503c
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    More about this item

    JEL classification:

    • E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian; Modern Monetary Theory
    • E3 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy

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