It is important for central banks to maintain credibility through rules based policy like inflation targeting.

Other economists said inflation targeting makes both economic and public policy sense by encouraging continuity at the Fed even as the top people there change.

Some economists have also suggested that an economy in Japan's situation can bootstrap itself back to prosperity through "inflation targeting."

Similar to inflation targeting, the central bank alters interest rates to be able to keep the index level constant throughout the years.

In 2002, the Central Bank adopted a modern monetary policy strategy, namely the "inflation targeting regime".

The outcome of this entire process was the explicit inflation targeting regime that started to be implemented in 2006.

Under inflation targeting, open market operations target a specific short term interest rate in the debt markets.

Country experiences show that inflation targeting is a best-practice strategy for monetary policy.

It is often true that a high degree of exchange rate flexibility would help inflation targeting to be more successful.

Once an economy has an effective and independent inflation targeting central bank and a floating exchange rate, the trade deficit is not really that important.