This paper analyzes Israel's recent inflation targeting policies and their role in the disinflation process in the 1990s. Special features of Israel underlying inflation targeting are: a high-inflation history; lack of consensus about the benefits from reducing inflation and thereby lack of full...

The shift to an inflation targeting regime has contributed to the relatively low inflation observed in some emerging market economies even where, as noted by many economists, the preconditions for successful implementation were not in place. The existence of managed exchange rate regimes, a...