Inflation Targeting Turns 20

It started in New Zealand, the land of the kiwi -- the bird, not the fruit which is originally from South China -- back in 1989. That was to be followed by Chile a year later and by Canada in 1991.

The reason you want to target inflation is because it is the worst enemy of the poor. Besides there is no real trade-off between economic growth and inflation. And that's so easy to prove. For example the growth rate over the past 9.25 years has been 4.3% but the average inflation rate since July 2005 under Sithanen's toxic medicine has been about 54% higher than what it has been under Federation 2. Industrial relations also tend to improve when trade-unions see that you're serious about fighting poverty.

The UK's Treasury has also evaluated the benefits of inflation-targeting while you can read Canada's interesting experience with inflation control by clicking on the image below.