That is one set of questions. But that is difficult to do without inflation expectation surveys or econometric models that give estimates of what the inflation rate will be. Nevertheless, many analytical problems are solved by targeting the expected inflation rate, providing that the expectation is an official and not wholly a market expectation. Flexible inflation targeting says that there are issues other than inflation that concern monetary policy, and in the model that Svensson describes output is the other concern. In practice, nobody, not even the toughest central banker is only an inflation targeter.
Nobody tries to keep inflation on target every minute or even every quarter.
If a disturbance comes, nobody says, We should be at 2.5 percent, we are at 3.75 percent, so we are going to jack interest rates up to 50 percent this week until we get inflation down to the goal in the next two months. Central bankers think about how quickly or slowly they should get rid of inflation. Targeting inflation a couple of years out gives authorities time to eliminate the short-run tradeoff or to take it into account. The approach works well as a pragmatic matter, but it is not yet fully integrated into the theory. That theoretical dimension is one aspect that needs further thought.