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Strategies for Controlling Inflation

In: Monetary Policy and Inflation Targeting

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  • Frederic S Mishkin

    (Federal Reserve Bank of New York)

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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Suggested Citation

  • 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:rba:rbaacv:acv1997-02
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    File URL: https://www.rba.gov.au/publications/confs/1997/pdf/mishkin.pdf
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    References listed on IDEAS

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    Cited by:

    1. Vittorio Corbo, 2002. "Monetary Policy in Latin America in the 90s," Central Banking, Analysis, and Economic Policies Book Series,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.
    2. Vittorio Corbo & Klaus Schmidt-Hebbel, 2001. "Inflation Targeting in Latin America," Working Papers Central Bank of Chile 105, Central Bank of Chile.
    3. Wieslawa Przybylska-Kapuścinska, 2007. "Monetary Policy of the Baltic States - new EU Members," Ekonomia journal, Faculty of Economic Sciences, University of Warsaw, vol. 19.
    4. Virginie Traclet, 2004. "Monetary and Fiscal Policies in Canada: Some Interesting Principles for EMU?," Staff Working Papers 04-28, Bank of Canada.
    5. Michal Jurek & Pawel Marszalek, 2015. "Policy alternatives for the relationship between ECB monetary and financial policies and new member states," Working papers wpaper112, Financialisation, Economy, Society & Sustainable Development (FESSUD) Project.
    6. Matteo Luciani, 2004. "A VAR Model for the Analysis of the Effects of Monetary Policy in the Euro Area," Rivista di Politica Economica, SIPI Spa, vol. 94(6), pages 175-214, November-.
    7. Chakraborty, Lekha S., 2006. "Fiscal deficit, capital formation, and crowding out: Evidence from India," Working Papers 06/43, National Institute of Public Finance and Policy.
    8. Miniaoui, Héla & Smida, Mounir, 2008. "Crédibilité des autorités monétaires et transparence – Quelle complémentarité dans le cas de la Tunisie? Une contribution au débat," L'Actualité Economique, Société Canadienne de Science Economique, vol. 84(2), pages 205-234, juin.
    9. Alfred Janc & Michal Jurek & Pawel Marszalek, 2013. "Studies in Financial Systems No 7 Financial System in Poland," FESSUD studies fstudy07, Financialisation, Economy, Society & Sustainable Development (FESSUD) Project.
    10. Martins Bitans & Dace Slakota & Ivars Tillers, 2001. "Price Dynamics in Latvia - Experience and Future Prospects," Working Papers 2001/01, Latvijas Banka.
    11. Martins Bitans, 2002. "Real Exchange Rate in Latvia (1994-2001)," Working Papers 2002/01, Latvijas Banka.
    12. 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., vol. 36(109), pages 897-927.
    13. Keith Sill, 1999. "Forecasts, indicators and monetary policy," Business Review, Federal Reserve Bank of Philadelphia, issue May, pages 3-14.

    More about this item

    Keywords

    price stability; exchange rate pegging; inflation targeting; monetary targeting;

    JEL classification:

    • E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit

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