IDEAS home Printed from https://ideas.repec.org/a/taf/applec/v58y2026i6p1132-1144.html

A case against average inflation targeting

Author

Listed:
  • Yusuf Ömür Yılmaz

Abstract

Well-anchored inflation rate below a constant inflation target rate of 2% leads policymakers to seek make-up policies, including Average Inflation Targeting, Price Level Targeting, etc. In light of this, this article mainly aims to find out which policy rule – Average Inflation Targeting, Constant Inflation Targeting and Price Level Targeting – provides better macroeconomic performances at lower interest rates. Average Inflation Targeting policy is welfare improving against the Constant Inflation Targeting, but not Price Level Targeting. We conclude that a comparative application of the Price Level Targeting produces better macroeconomic performances, despite some weaknesses. We also discuss the source of the latest US inflation rate surge, and find that the design of the average inflation targeting policy can be responsible for extra inflation rate volatility.

Suggested Citation

  • Yusuf Ömür Yılmaz, 2026. "A case against average inflation targeting," Applied Economics, Taylor & Francis Journals, vol. 58(6), pages 1132-1144, February.
    • Handle: RePEc:taf:applec:v:58:y:2026:i:6:p:1132-1144
    DOI: 10.1080/00036846.2025.2464819
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/00036846.2025.2464819
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/00036846.2025.2464819?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:applec:v:58:y:2026:i:6:p:1132-1144. See general information about how to correct material in RePEc.

    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.

    We have no bibliographic references for this item. You can help adding them by using 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/RAEC20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.