Inflation targeting and Taylor Rules as benchmarks for monetary policy decisions
Subtitle: a critical survey
By: Huw Pill, Massimo Rostagno
Contributors: Rostagno, Massimo; Harvard Business School. Division of Research
Series: Working paper / Division of Research, Harvard Business School -- 02-034; Working paper (Harvard Business School. Division of Research) -- 02-034
Publisher: Division of Research, Harvard Business School
Published: 2001
Place of publication: Boston
Language: eng
Number of pages: 31
Subjects: Monetary policy; Econometric models; Anti-inflationary policies; Interest rates; Government policy
Description: In the academic literature, a broad consensus appears to be emerging in favour of so-called "flexible inflation targeting" stragegies for monetary policy. The late 1980s and 1990s saw several central banks adopt some version of inflation targeting. However, the adoption of inflation targeting has not been universal. In particular, neither the U.S. Federal Reserve nor the European Central Bank have adopted such an approach. This paper offers a critical survey of the academic literature on inflation targeting (and the (related) Taylor rules for monetary policy), organised around a typology of inflation targeting frameworks developed in section 2.
Notes: Includes bibliographical references.