Chapter 22. Inflation Targeting Inflation targeting is a monetary policy strategy characterized by an announced numerical inflation target an implementation of monetary policy that gives a major role to an inflation forecast that has been called forecast targeting and a high degree of transparency and accountability. It was introduced in New Zealand in 1990 has been very successful in terms of stabilizing both inflation and the real economy and as of 2010 has been adopted by about 25 industrialized and emerging market economies. This chapter discusses the history macroeconomic effects theory practice and future of inflation targeting.