Goethe Business School 41 Inflation targeting: advantages Inflation targeting enables the central bank to focus on domestic policy objectives, but a stable relationship between money and the price level is not critical for its success; is highly transparent and easily understood; increases the accountability of the central bank because of a numerical target as a benchmark; seems to ameliorate the effects of inflationary shocks (introduction of a GST in Canada; exit of the British pound from the ERM in 1992).
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