INFLATION TARGETING AMID 2020–2022 SHOCKS: INTERNATIONAL AND RUSSIAN EXPERIENCE

Abstract

Introduction. The article analyzes and evaluates the effectiveness of inflation targeting regimes applied by central banks during economic crises by examining the experience of inflation targeting during the COVID-19 pandemic and the geopolitical tensions triggered by the special military operation that began in February 2022. Within the framework of the study, the author identifies the effectiveness of inflation targeting and its positive effects under the crisis conditions of 2020–2022.
Materials and methods. The work employs a combination of general scientific and formal-logical methods (including methods of cognition, description, analysis, induction, deduction, comparison, analogy, systematization, and modeling).
Results of the study. The analysis of inflation targeting during the crisis conditions of 2020–2022 revealed varying impacts of inflation targeting on inflation levels in different economies, as well as a reduction and limited application of inflation targeting measures during crises. On the one hand, the use of inflation targeting measures helps shape certain inflation expectations among economic agents, thereby limiting pro-inflationary risks. On the other hand, the economic challenges faced by countries during the crisis conditions of 2020–2022 significantly reduced the effectiveness of inflation targeting measures, making it difficult for some countries to bring inflation levels back to their targets.
Discussion and conclusion. The study showed that the application of inflation targeting during a crisis helps halt inflation growth in the short term and subsequently return it to the target level. However, inflation targeting is most effective during the postcrisis period, when signs of economic recovery emerge.