Inflation-targeting credibility in Latin America wavers, risking economic stability.
Inflation targeting is a popular strategy in Latin America to control rising prices. The success of this approach depends on how believable the inflation target is. The more people trust the target, the better it works. Over time, inflation targets in Latin America gained credibility, but when inflation goes above the target, trust in the system weakens. By the end of the study, there were signs that people were losing faith in the inflation target.