Inflation Targeting - The Holy Grail of Monetary Policy?
Hong Kong Institute for Monetary and Financial Research (HKIMR) Research Paper WP No. 02/2002
Journal of Policy Reform, 5(3), 2002, pp. 161-171
15 Pages Posted: 24 Aug 2007 Last revised: 26 Jul 2022
Date Written: January 1, 2002
Abstract
This working paper was written by Hans Genberg (Graduate Institute of International Studies).
This paper argues that the success of inflation targeting is principally the result of having a clear unambiguous goal, price stability, for monetary policy that is determined not only by the central bank but by the political authorities more generally. With such a goal in place, and with support from other macroeconomic policies, the actual operating procedure a central bank should follow depends critically on the transmission mechanism of monetary policy and on the sources of shocks in the economy. It follows that implementation of a strategy of targeting inflation could look very different from one country to another. What would be an appropriate policy rule in an industrialized country would not necessarily be suitable in an emerging market even if the ultimate goal of the central bank were the same.
Suggested Citation: Suggested Citation
Do you have negative results from your research you’d like to share?
Recommended Papers
-
Monetary Policy Rules and Macroeconomic Stability: Evidence and Some Theory
By Richard Clarida, Jordi Galí, ...
-
The Science of Monetary Policy: A New Keynesian Perspective
By Richard Clarida, Jordi Galí, ...
-
The Science of Monetary Policy: a New Keynesian Perspective
By Richard Clarida, Jordi Galí, ...
-
An Optimization-Based Econometric Framework for the Evaluation of Monetary Policy: Expanded Version
-
Monetary Policy Rules in Practice: Some International Evidence
By Richard Clarida, Jordi Galí, ...
-
Inflation Forecast Targeting: Implementing and Monitoring Inflation Targets