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Inflation Targeting in Canada, New Zealand, Sweden, the United Kingdom, and in General


  • Bennett T. McCallum


This paper begins with a description of the inflation targeting arrangements currently in place in the four above-mentioned countries and their performance records through mid-1995 are reviewed. It is argued, however, that too little time has passed for conclusions to be drawn, so that tentative evaluations of inflation targeting need to be based on theoretical analysis and more generalized historical experiences. Accordingly, two alternative rationalizations are considered, one stemming from the literature on dynamic inconsistency and the other based on more pragmatic considerations. In addition, it is asked whether some other nominal magnitude might be preferable as a target variable and the issue of growth-rate versus growing-level target paths is addressed.

Suggested Citation

  • Bennett T. McCallum, 1996. "Inflation Targeting in Canada, New Zealand, Sweden, the United Kingdom, and in General," NBER Working Papers 5579, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:5579
    Note: EFG ME

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    References listed on IDEAS

    1. David Card, 1990. "The Impact of the Mariel Boatlift on the Miami Labor Market," ILR Review, Cornell University, ILR School, vol. 43(2), pages 245-257, January.
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    4. Anderson, Patricia M & Meyer, Bruce D, 1993. "Unemployment Insurance in the United States: Layoff Incentives and Cross Subsidies," Journal of Labor Economics, University of Chicago Press, vol. 11(1), pages 70-95, January.
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    7. Gary S. Becker, 1983. "A Theory of Competition Among Pressure Groups for Political Influence," The Quarterly Journal of Economics, Oxford University Press, vol. 98(3), pages 371-400.
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    JEL classification:

    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models


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