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Inflation Targeting: A New Framework for Monetary Policy?

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  • Ben S. Bernanke
  • Frederic S. Mishkin

Abstract

In 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.

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Bibliographic Info

Article provided by American Economic Association in its journal Journal of Economic Perspectives.

Volume (Year): 11 (1997)
Issue (Month): 2 (Spring)
Pages: 97-116

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Handle: RePEc:aea:jecper:v:11:y:1997:i:2:p:97-116

Note: DOI: 10.1257/jep.11.2.97
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  1. Barro, Robert J. & Gordon, David B., 1983. "Rules, discretion and reputation in a model of monetary policy," Journal of Monetary Economics, Elsevier, vol. 12(1), pages 101-121.
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  20. repec:fth:baesse:9425 is not listed on IDEAS
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  1. 'A Century of U.S. Central Banking: Goals, Frameworks, Accountability'
    by Mark Thoma in Economist's View on 2013-07-10 13:48:26
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