Do Actions Speak Louder Than Words? Assessing the Effects of Inflation Targeting Track Records on Macroeconomic Performance

Inflation Targeting (IT) has become a prevalent monetary policy framework in the past three decades, as more central banks adopted and maintained price stability their primary mandate. Using dataset of 68 major advanced countries emerging markets economies, this paper evaluates effects inflation targeting countries’ track records on macroeconomic performance, measured by real GDP growth CPI inflation. This constructs novel record measures establishes new stylized facts heterogeneity tendency managing with respect to stated objectives. finds evidence that most targeters conduct dynamic frequently updating target bands, band sizes are wide-ranging across IT countries. We empirically study contemporaneous future performance. Results from panel local projection regressions suggest better do not lead superior rates short term.