Central bank independence and inflation targeting: monetary policy paradigms for the next millenium?
An expanding body of literature holds two truths about monetary policy to be self-evident: Effective central banks must be independent from undue political interference, and they would do well to target the rate of inflation directly. The genesis of this literature may be found in the concern about the effective use of the significant power wielded by central banks around the world, and in the response to a pivotal and turbulent period in economic history. The marked rise in the level and variability of inflation following the oil price surges of the 1970s led many to question the Fed's and other central banks' commitment to a low and stable inflation rate.> This article takes a critical look at the theory of inherent inflationary bias and the proposed solutions to the bias, focusing particularly on mechanisms for ensuring central bank independence and on inflation targeting. It then examines the robustness of the empirical results that are often used to support the validity of the solutions.
Volume (Year): (1997)
Issue (Month): Jan ()
|Contact details of provider:|| Postal: |
Web page: http://www.bos.frb.org/Email:
More information through EDIRC
|Order Information:|| Email: |
When requesting a correction, please mention this item's handle: RePEc:fip:fedbne:y:1997:i:jan:p:19-36. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Catherine Spozio)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.