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The Future of Inflation Targeting *
Author(s) -
WALSH CARL E.
Publication year - 2011
Publication title -
economic record
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.365
H-Index - 42
eISSN - 1475-4932
pISSN - 0013-0249
DOI - 10.1111/j.1475-4932.2011.00735.x
Subject(s) - inflation targeting , monetary policy , inflation (cosmology) , economics , central bank , great moderation , monetary economics , dozen , macroeconomics , financial system , physics , arithmetic , mathematics , theoretical physics
By the end of the Great Moderation, over two dozen central banks were formal inflation targeters, and others, such as the Federal Reserve, the European Central Bank and the Swiss National Bank, behaved essentially as inflation targeters even though they were resistant to identifying themselves as such. However, the past 3 years have seen central banks faced with new challenges, and these have raised questions about the future of inflation targeting as a framework for the conduct of monetary policy. I consider three suggested modifications to this policy framework: incorporating additional goals among a central bank's objectives; raising the average target for inflation; and switching to price level targeting.