We study the characteristics of inﬂation targeting as a shock absorber, using quarterly data for a large panel of countries. To overcome an endogeneity problem between monetary regimes and the likelihood of crises, we propose to study large natural disasters. We ﬁnd that inﬂation targeting improves macroeconomic performance following such exogenous shocks. It lowers inﬂation, raises output growth, and reduces inﬂation variability compared to alternative monetary regimes. This performance is mostly due to a different response of monetary policy and ﬁscal policy under inﬂation targeting. Finally, we show that only hard, but not soft, targeting reaps the rewards: deeds, not words, matter for successful monetary stabilization.