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

38 Pages Posted: 23 Sep 1996 Last revised: 13 May 2000

See all articles by Bennett T. McCallum

Bennett T. McCallum

Carnegie Mellon University - David A. Tepper School of Business; National Bureau of Economic Research (NBER)

Date Written: May 1996

Abstract

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

McCallum, Bennett T., Inflation Targeting in Canada, New Zealand, Sweden, the United Kingdom, and in General (May 1996). NBER Working Paper No. w5579. Available at SSRN: https://ssrn.com/abstract=3342

Bennett T. McCallum (Contact Author)

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