Optimal Horizons for Inflation Targeting

The Bank of England Working Paper No. 119

35 Pages Posted: 25 Sep 2000

See all articles by Nicoletta Batini

Nicoletta Batini

International Monetary Fund (IMF)

Edward Nelson

Board of Governors of the Federal Reserve System

Date Written: July 2000

Abstract

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

Batini, Nicoletta and Nelson, Edward, Optimal Horizons for Inflation Targeting (July 2000). The Bank of England Working Paper No. 119. Available at SSRN: https://ssrn.com/abstract=237150 or http://dx.doi.org/10.2139/ssrn.237150

Nicoletta Batini (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States

Edward Nelson

Board of Governors of the Federal Reserve System ( email )

20th Street and Constitution Avenue NW
Washington, DC 20551
United States

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