MGT502: Principles of Economics - Inflation Targeting Analysis

This report, focusing on principles of economics, evaluates inflation targeting as a monetary policy tool employed by central banks to maintain price stability and support long-term economic growth. It analyzes the implementation and outcomes of inflation targeting in various countries, including Australia, New Zealand, Brazil, and Poland. The report highlights the successes in Australia and New Zealand, where the policy has contributed to controlled inflation and unemployment rates, and improved economic stability. It contrasts these with the experiences of Brazil and Poland, where the outcomes have been mixed, influenced by factors like exchange rate policies. The report further discusses the role of exchange rates in inflation targeting economies and compares the policy with other monetary approaches, such as those used by the United States and Japan. The analysis suggests that while inflation targeting can be effective, its success depends on various factors, including the economic context and the flexibility of exchange rate regimes.