The Research On Inflation Targeting And Its Suitability In China

There have been the central banks of many countries which announce and adopt substantially inflation targeting since the 1990s. Inflation targeting can overcome the time inconsistency problem and improve the transparency and credibility of monetary policy, it can also strengthen the central bank's responsibility. After 20 years of international practice, inflation targeting has been proved that it does well in stabilizing prices and reducing inflation expectations and so on.Based on the practice of inflation targeting precondition and inflation targeting of East Asia countries as the research object, we find that China already have partial conditions for implementing inflation targeting, inflation targeting regime is the feasible direction of monetary policy.In this study, the author firstly introduces the basic theory of inflation targeting and the prerequisites, secondly we use qualitative analysis method to analyze the existing problems of the current monetary policy and the conditions that China has, and then introduces and summarize the inflation targeting practical experience of East Asian countries using comparative analysis and combining the theory and practice method. Based on these, we put forward the following suggestions:improve China's inflation forecasting ability; Improve people's bank independence; Enhance monetary policy transparency; Quickening marketization of interest rate reform.