Final answer:
Inflation targeting is a monetary policy strategy where the central bank focuses on keeping inflation low. Central banks in many countries have implemented this strategy, while others take into account both unemployment and inflation. There is ongoing debate about the focus of central banks' policies.
Step-by-step explanation:
Inflation targeting is a monetary policy strategy where the central bank focuses primarily on keeping inflation low. Many countries have implemented inflation targeting by rewriting their central banking laws. Central banks in various countries, such as Austria, Brazil, Canada, Israel, Korea, Mexico, New Zealand, Spain, Sweden, Thailand, and the United Kingdom, have faced a legal requirement to target the inflation rate.
However, the Federal Reserve in the United States does not practice inflation targeting. Instead, it takes both unemployment and inflation into account when making monetary policy decisions.
There is ongoing debate among economists about whether a central bank should solely focus on inflation or have greater discretion. Some argue that politicians' pressures to pursue loose monetary policies may lead to higher inflation without long-term reduction in unemployment.