The International Experience Of Inflation Targeting And Prospects In China

From the appearance of the inflation targeting until now ,in no more than 20 years ,the inflation targeting has always been a very young monetary policy , but it has changed the economic situation in many countries, making them off inflation successfully.And now in the global scope more than 40 countries with inflation have adopted this monetary policy, which also explains the necessity of its existence.The first part of the article introduces various theories about the inflation targeting, including the definition, characteristics, and the prerequisites, etc. Then it introduces several different inflation targetings the complete representative inflation targeting in New Zealand, its high prestige, its clear and definite goal, its high transparency and responsibility. They are all clearly announced the adoption of the inflation targeting in their countries. Then it introduces the eclectic inflation targeting in countries like Switzerland . They have a high prestige and can maintain a low inflation, but they don't not declared explicitly they have adopted such inflation targeting in their countries. Finally it introduces the inflation targeting in the countries as Israel. They admits the inflation targeting in part of their countries but they have no ability to achieve it.They are mostly the countries from the emerging world. In this section, it summarizes respectively the rise ,the development, the experiences and lessons and their different operation framework of the inflation targeting in these countries.And I believe that China will benefit from them in the future after it puts inflation targeting into practice.In the following section, it illustrates the economic situation in China. At present, China's monetary policy is challenging , it needs a new monetary policy to guide its way. In the end,in order to reduce the obstacles in formal using the inflation targeting in future, it is necessary for us to do some reforms: determining a low inflation nominal anchor; choosing a suitable price index as the measure indicators of the inflation targeting; determining a goal for the rate of the inflation targeting or an interval goal; strengthening the independence of the Central Bank; enhancing transparency and the responsibility of the Central Bank; and perficting statistical index, improving the ability of prediction.In the last chapter,it states that the inflation targeting has ever been questioned, but this can not prevent it being carried out in our country. But it also draws a conclusion that it is not suitable for China to use the inflation targeting at once, and that it can be implemented gradually.