2.2 Inflation targeting in developing countries
As mentioned earlier, inflation targeting literature review in developing
countries is limited and covers cases of single countries. Masson, Savastano, and Sharma (1998) investigated the applicability of an inflation
targeting framework in developing countries. They concluded that the
preconditions for adopting such policy in developing countries are not met
yet. They argued that central banks should have a considerable degree of
independence and the country should not show fiscal dominance to adopt
an inflation targeting policy. Sweidan (2008) proved theoretically that