This paper addresses first whether scientific evidence—theoretical and empirical—exists to support the inflation targeting regime and, secondly whether inflation target is worthwhile for Egypt. The method in this paper builds on a literature review of the theoretical and empirical research in the field of economics. Our conclusion shows that there is incomplete evidence from a number of countries supporting the inflation targeting regime as an effective monetary policy framework for the achievement of macroeconomic stability. The paper concludes that the Central Bank of Egypt and the Egyptian economy is not yet ready for the implementation of an inflation targeting regime.
KeywordsInflation TargetingMonetary RegimesGranger Causality Test
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