Monetary institutions and economic performance in Latin America: the experience with an inflation targeting regime in the period 2000-2020

The chapter investigates, both theoretically and empirically, the Latin American experience with Inflation Targeting (IT) in the period from 2000 to 2020, emphasizing the effects of monetary policy on inflation and economic performance. Based on the theoretical-empirical literature on the subject, an econometric exercise was carried out for six of the eight countries which adopted the IT regime. The results showed, among other aspects, that despite the relative price stability, these economies experienced a worsening of external insertion and economic stagnation, which could be explained most pertinently due to conducting the monetary policy through the IF regime.