Most inflation-targeting central banks attempt to gain flexibility in such cases by focusing on core inflation, by having relatively wide target ranges, by stipulating “escape clauses” that allow inflation to diverge from the target for a while, or by aiming at inflation well in the future or at an average rate over the business cycle and thus allowing enough time for the effect of such shocks to have died down.
Despite such elements of flexibility, an inflation-targeting regime may still not typically attend sufficiently to output variation or financial stability. Furthermore, these elements of flexibility may not foster the credibility of the central bank any better than a system of multiple objectives. The longer the policy timeframe and the wider the band for an inflation-targeting regime, the lower credibility will tend to be.