Inflation targeting is a central bank policy developed by Ben Bernanke and Mishkin in a paper of the same name. Central banks engaged in this policy declare a desired rate of inflation (usually 2%) and attempt to stay within one point of it.

Generally the advantages are described as increased transparency, coherence of policy and flexibility of the target. The disadvantages are the possiblity that the CB will neglect its other duties and the impracticality of IT because price levels can have large variances.

This macro-stub needs improving.