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Inflation targeting drawbacks in the absence of a 'natural' anchor

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  • Angel Asensio

    () (CEPN - Centre d'Economie de l'Université Paris Nord (ancienne affiliation) - UP13 - Université Paris 13 - CNRS - Centre National de la Recherche Scientifique)

Abstract

The economic performances of the Eurozone look weaker than those of the United States overthe period 1999-2006, in spite of the fact that the former applies more thoroughly the 'newmacroeconomics' governance rules concerning public deficits and inflation control. Theliterature emphasizes Alan Greenspan's pragmatism when discussing the relative success ofthe Fed, but the reasons why pragmatism ought to do better than a thorough application of the'new macroeconomics' theoretical recommendations remain unexplored. The paper focuses onthe advantage of monetary policy pragmatism in the face of Keynesian uncertainty. Morespecifically, it points out the trials of the 'new macroeconomics' principles of monetary policywhen they are implemented in a Keynesian context, that is, within a system which does nothave any 'natural' anchor.

Suggested Citation

  • Angel Asensio, 2007. "Inflation targeting drawbacks in the absence of a 'natural' anchor," Post-Print halshs-00189225, HAL.
  • Handle: RePEc:hal:journl:halshs-00189225
    Note: View the original document on HAL open archive server: https://halshs.archives-ouvertes.fr/halshs-00189225
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    References listed on IDEAS

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    Keywords

    Monetary policy; Post Keynesian; Uncertainty;

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