Inflation Targeting in the United States?
The paper begins by tracing the origins of the case for inflation targeting in postwar US monetary history. It describes five aspects of inflation targeting practiced implicitly by the Greenspan Fed. It argues that (1) low long run inflation should be an explicit priority for monetary policy, (2) as a practical matter it is not desirable for the Fed to vary its short run inflation target (3) strict inflation targeting can be regarded as effcient constrained countercyclical stabilization policy. Finally, the paper suggests that the Fed publicly acknowledge its implicit priority for low long run inflation, that Congress recognize that priority, and that in return representatives of the FOMC consider participating in a monetary policy forum to better inform the public and congressional oversight committees about current monetary policy.
|Date of creation:||Sep 2003|
|Date of revision:|
|Publication status:||published as Inflation Targeting in the United States? , Marvin Goodfriend. in The Inflation-Targeting Debate , Bernanke and Woodford. 2005|
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- Marvin Goodfriend & Robert G. King, 1998.
"The new neoclassical synthesis and the role of monetary policy,"
98-05, Federal Reserve Bank of Richmond.
- Marvin Goodfriend & Robert King, 1997. "The New Neoclassical Synthesis and the Role of Monetary Policy," NBER Chapters, in: NBER Macroeconomics Annual 1997, Volume 12, pages 231-296 National Bureau of Economic Research, Inc.
- Frederic S. Mishkin & Adam S. Posen, 1997.
"Inflation targeting: lessons from four countries,"
Economic Policy Review,
Federal Reserve Bank of New York, issue Aug, pages 9-110.
- Michael Woodford, 2001.
"Inflation Stabilization and Welfare,"
NBER Working Papers
8071, National Bureau of Economic Research, Inc.
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