Inflation Targeting and Macroeconomic Stability: Lessons from Emerging Markets

Abstract

This study investigates the effectiveness of inflation targeting in maintaining macroeconomic stability in emerging markets such as Brazil, Turkey, and South Africa. Using 25 years of macroeconomic data and econometric modeling, the research finds that countries implementing credible inflation targeting frameworks experience lower inflation volatility and more stable growth. However, the effectiveness is contingent on central bank independence, fiscal discipline, and financial market development. The study provides insights for policymakers considering inflation-targeting regimes to achieve sustainable economic growth while controlling inflationary pressures.