The Illusions of Inflation Targeting, With an Application to Ukraine
Journal: The Quarterly Journal of Austrian Economics
Year: 2021

This article reviews the analytical justification, the theoretical content, and the practical experience of inflation targeting, which has become the standard framework for monetary policy. It shows that due to the inflation-targeting literature’s neglect for the money demand as part of the monetary relation that drives price determination, it provides a distorted theoretical account of the most basic relations in a monetary economy and an illusionary vision of what a modern central bank could a