(Post) Keynesian alternative to inflation targeting
AbstractWhile the mainstream policies can not be surpassed in the enchanted ‘optimizable'world, (Post) Keynesians have to resign themselves to manage without magic wand inthe uncertain real world. The paper discusses the monetary rules proposed in the recentPost Keynesian literature. It argues that the long-term interest rate is too imperfectlycontrolled for such rules being feasible. Consequently, the quest for credibility isirrelevant, for it makes not much sense to wonder whether authorities will honour theircommitment on an unfeasible ideal target. The right question is whether authoritiespursue convincing objectives so as to move the conventional expectation of the future(and the related interest rate) towards full employment. It is a matter of confidence.The basic principles involved in such an approach to economic policy are discussed.
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Bibliographic InfoPaper provided by HAL in its series Post-Print with number halshs-00335560.
Date of creation: 04 Apr 2008
Date of revision:
Publication status: Published - Presented, Inflation targeting, is there a credible alternative? Organized by the PostKeynesian Study Group, Balliol College., 2008, Oxford, United Kingdom
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Interest rate rule; Inflation targeting; PostKeynesian; Monetary policy;
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-11-11 (All new papers)
- NEP-CBA-2008-11-11 (Central Banking)
- NEP-MAC-2008-11-11 (Macroeconomics)
- NEP-MON-2008-11-11 (Monetary Economics)
- NEP-PKE-2008-11-11 (Post Keynesian Economics)
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