IMF Working Papers

Navigating the 2022 Inflation Surge

By Patrick A. Imam, Tigran Poghosyan

October 24, 2025

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Patrick A. Imam, and Tigran Poghosyan. "Navigating the 2022 Inflation Surge", IMF Working Papers 2025, 212 (2025), accessed October 25, 2025, https://doi.org/10.5089/9798229027922.001

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Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

This paper examines the effectiveness of inflation targeting (IT) frameworks during the global inflation surge of 2022, a shock primarily driven by large adverse supply side disruptions following the onset of the War in Ukraine. The empirical findings suggest that (de jure) IT frameworks did not systematically deliver better inflation outcomes during this episode. The decline in inflation back towards historical norms was broadly comparable across (de jure) IT and non-IT country groups. While (de jure) IT central banks hiked their policy rates by more than non-IT central banks on average, this did not help with achieving better inflation outcomes. Also, we find no evidence that a more flexible exchange rate after the shock in (de jure) IT central banks. These findings suggest that (de jure) IT does not necessarily imply an advantage for monetary policy, particularly in the face of large, global supply shocks. Further analysis is warranted on how monetary policy frameworks can adapt to an environment characterized by more frequent and persistent supply-side disruptions. While using a de facto classification of IT regimes would be preferable, the absence of a comprehensive database makes this infeasible.

Subject: Economic theory, Inflation, Inflation targeting, Monetary policy, Prices, Supply shocks

Keywords: Central Bank Credibility, Global, Inflation, Inflation targeting, Inflation Targeting, Supply shocks, Supply Shocks, World

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