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Strategies for Controlling Inflation

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  • Frederic S. Mishkin

Abstract

This paper examines what strategies policymakers have used to both reduce and control inflation. It first outlines why a consensus has emerged that inflation needs to be controlled. Then it examines four basic strategies: exchange rate pegging, monetary targeting, inflation targeting, and the just do it' strategy of preemptive monetary policy with no explicit nominal anchor. The discussion highlights the advantages and disadvantages of each strategy and sheds light not only on how disinflation might best be achieved, but also on how hard won gains in lowering inflation can be locked in.

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 6122.

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Date of creation: Feb 1998
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Publication status: published as Frederic S Mishkin, 1997. "Strategies for Controlling Inflation," RBA Annual Conference Volume, in: Philip Lowe (ed.), Monetary Policy and Inflation Targeting Reserve Bank of Australia.
Handle: RePEc:nbr:nberwo:6122

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Cited by:
  1. Alfred Janc & Michal Jurek & Pawel Marszalek, 2013. "Studies in Financial Systems No 7 Financial System in Poland," FESSUD studies, Financialisation, Economy, Society & Sustainable Development (FESSUD) Project fstudy07, Financialisation, Economy, Society & Sustainable Development (FESSUD) Project.
  2. Martins Bitans & Dace Slakota & Ivars Tillers, 2001. "Price Dynamics in Latvia - Experience and Future Prospects," Working Papers, Latvijas Banka 2001/01, Latvijas Banka.
  3. Vittorio Corbo, 2002. "Monetary Policy in Latin America in the 90s," Central Banking, Analysis, and Economic Policies Book Series, Central Bank of Chile, in: Norman Loayza & Klaus Schmidt-Hebbel & Norman Loayza (Series Editor) & Klaus Schmidt-Hebbel (Series (ed.), Monetary Policy: Rules and Transmission Mechanisms, edition 1, volume 4, chapter 6, pages 117-166 Central Bank of Chile.
  4. Chakraborty, Lekha S., 2006. "Fiscal deficit, capital formation, and crowding out: Evidence from India," Working Papers, National Institute of Public Finance and Policy 06/43, National Institute of Public Finance and Policy.
  5. Andrés Elberg & Vittorio Corbo & José Tessada, 1999. "Monetary Policy in Latin America: Underpinnings and Procedures," Latin American Journal of Economics-formerly Cuadernos de Economía, Instituto de Economía. Pontificia Universidad Católica de Chile., Instituto de Economía. Pontificia Universidad Católica de Chile., vol. 36(109), pages 897-927.
  6. Keith Sill, 1999. "Forecasts, indicators and monetary policy," Business Review, Federal Reserve Bank of Philadelphia, Federal Reserve Bank of Philadelphia, issue May, pages 3-14.
  7. Virginie Traclet, 2004. "Monetary and Fiscal Policies in Canada: Some Interesting Principles for EMU?," Working Papers, Bank of Canada 04-28, Bank of Canada.
  8. Vittorio Corbo & Klaus Schmidt-Hebbel, 2001. "Inflation Targeting in Latin America," Working Papers Central Bank of Chile, Central Bank of Chile 105, Central Bank of Chile.
  9. Martins Bitans, 2002. "Real Exchange Rate in Latvia (1994-2001)," Working Papers, Latvijas Banka 2002/01, Latvijas Banka.

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