Optimal Horizons for Inflation Targeting
The Bank of England Working Paper No. 119
35 Pages Posted: 25 Sep 2000
Date Written: July 2000
In this paper we investigate the problem of selecting an optimal horizon for inflation targeting in the United Kingdom. There are two key ways of thinking about an optimal horizon, so we look at optimal horizons for both of these interpretations. In addition, to see whether our results are robust in the face of model uncertainty, we compute optimal horizons for two different models with divergent structural and dynamic characteristics.
JEL Classification: E52, E58
Suggested Citation: Suggested Citation