Inflation Targeting: A New Framework for Monetary Policy?
AbstractIn recent years, a number of industrialized countries have adopted a strategy for monetary policy known as 'inflation targeting.' The authors describe how this approach has been implemented in practice and argue that it is best understood as a broad framework for policy, which allows the central bank 'constrained discretion,' rather than as an ironclad policy rule in the Friedman sense. They discuss the potential of the inflation-targeting approach for making monetary policy more coherent and transparent and for increasing monetary policy discipline. The authors' final section addresses some additional practical issues raised by this approach.
CitationBernanke, Ben S., and Frederic S. Mishkin. 1997. "Inflation Targeting: A New Framework for Monetary Policy?" Journal of Economic Perspectives, 11 (2): 97-116. DOI: 10.1257/jep.11.2.97
- E52 Monetary Policy
- E31 Price Level; Inflation; Deflation
- E58 Central Banks and Their Policies