The article sums up the economic thinking behind the system for targeting inflation in Hungary and the main economic-policy experiences with this. It presents briefly a framework model that the author sees as best reflecting present central-bank thinking about the functioning of the economy. It summarizes what normative conclusions can be drawn with the model about optimal monetary policy, and how these theoretical issues are reflected in the monetary systems for targeting inflation. The article then turns to international experience with the effectiveness and success of the regime. Finally, the author looks back over five years at the conditions that accompanied the targeting of inflation, at subsequent experiences with the economic-policy issues of that period, and at operation of the system so far.
A. Csermely, no address given, contact the journal editor
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