ABSTRACT
Between the end of the twentieth and the start of the twenty first century, an inflation targeting (IT) framework clearly became very popular; however, while the 1990s and the early 2000s were the years of its unquestionable successes, the global financial crisis of 2008 marked a point at which sentiments towards the IT started to change. In the aftermath of the recent global and European crises, several IT central banks were confronted with the problem of providing sufficient monetary policy accommodation due to the zero lower bound constraint. Thus, the role of financial stability in monetary policy considerations and the issue of extending the scope of monetary policy measures have become widely discussed topics. Regarding the research hypothesis, based on the analysis carried out, it can be concluded that, indeed, the quality of the institutional set-ups of monetary authorities pursuing an inflation targeting regime materially affects monetary policy effectiveness.
