Relevance of the inflation targeting policy

The main of this paper is to check whether the inflation targeting policy (ITP) had a signifcant impact on the change of the inflation path for four industrial inflation-targeting countries. We use the evolutionary spectral analysis, as defined by Priestley (1965- 196). Then, we use a test that can detect many break points on the time series. We show the existence of a common consensus that monetary policy should target price stabilty as its primary goal through the identification of common break in 3rd quarter 198. This break is the result of the disinflationary environment made by these countries to prepare the implementation of the ITP. Secondly, we identifed two types of countries acording to the maner to make this disinflationary environment. Some of them, like New Zealand Canada and Sweden, prepare an environment to implement the inflation targeting policy and made some action to raise credibilty and transparency of the policies-makers. The other kinds, such the United-kingdom, adopted inflation targeting policy without any actions to raise credibilty and didn’t satisfy the inflation targeting conditions like central Bank independence. We explain this for the first kind of countries by the high and volatile experience of inflation level.