By employing Propensity Score Matching analysis, this study aims first to show
how inflation targeting affects macroeconomic indicators in middle and high-income
countries, and second highlights whether the global financial crisis has created a change in
the way that inflation targeting impacts on them. Results prove that adopting inflation
targeting increases the real GDP and budget deficit, and decreases the current account
deficit. However, its effect on inflation is puzzling. The high-income inflation targeters
should be careful about implementing the strategy and inflation targeting should be
accompanied by the fiscal policy either in middle or in high-income countries