The phrase “inflation targeting” has had both a positive and negative effect on the public understanding of monetary policy and as a result on its implementation. 5 It has enhanced the transparency and accountability of monetary policy in many countries and has helped improve public awareness of the price stability goal of monetary policy.
However, looking back to the period as the bubble accumulated, I have the impression that a literal and narrow understanding of “inflation targeting” going beyond its original intention gradually took hold. Though perhaps not acknowledged, this began to constrain the flexible implementation of monetary policy based on overall macroeconomic and financial conditions.