Inflation Targeting: Lessons from the International Experience
()
About this ebook
How should governments and central banks use monetary policy to create a healthy economy? Traditionally, policymakers have used such strategies as controlling the growth of the money supply or pegging the exchange rate to a stable currency. In recent years a promising new approach has emerged: publicly announcing and pursuing specific targets for the rate of inflation. This book is the first in-depth study of inflation targeting. Combining penetrating theoretical analysis with detailed empirical studies of countries where inflation targeting has been adopted, the authors show that the strategy has clear advantages over traditional policies. They argue that the U.S. Federal Reserve and the European Central Bank should adopt this strategy, and they make specific proposals for doing so.
The book begins by explaining the unique features and advantages of inflation targeting. The authors argue that the simplicity and openness of inflation targeting make it far easier for the public to understand the intent and effects of monetary policy. This strategy also increases policymakers' accountability for inflation performance and can accommodate flexible, even "discretionary," monetary policy actions without sacrificing central banks' credibility. The authors examine how well variants of this approach have worked in nine countries: Germany and Switzerland (which employ a money-focused form of inflation targeting), New Zealand, Canada, the United Kingdom, Sweden, Israel, Spain, and Australia. They show that these countries have typically seen lower inflation, lower inflation expectations, and lower nominal interest rates, and have found that one-time shocks to the price level have less of a "pass-through" effect on inflation. These effects, in turn, are improving the climate for economic growth. The authors warn, however, that the success of inflation targeting depends on operational details, such as how the targets are defined and when they are announced. They also show that inflation targeting is not a panacea that can make inflation perfectly predictable or reduce it without economic costs.
Clear, balanced, and authoritative, Inflation Targeting is a groundbreaking study that will have a major impact on the debate over the right monetary strategy for the coming decades. As a unique comparative study of what central banks actually do in different countries around the world, this book will also be invaluable to anyone interested in how economic policy is made.
Ben S. Bernanke
Ben S. Bernanke served as chairman of the Federal Reserve from 2006 to 2014. He was named Time magazine’s Person of the Year in 2009. Prior to his career in public service, he was a professor of economics at Princeton University.
Read more from Ben S. Bernanke
The Federal Reserve and the Financial Crisis Rating: 4 out of 5 stars4/5Essays on the Great Depression Rating: 4 out of 5 stars4/5
Related to Inflation Targeting
Related ebooks
Interest Rate Cycles: An Introduction Rating: 5 out of 5 stars5/5The European Economy since 1945: Coordinated Capitalism and Beyond Rating: 2 out of 5 stars2/5The Escape from Balance Sheet Recession and the QE Trap: A Hazardous Road for the World Economy Rating: 5 out of 5 stars5/5Frontier Investor: How to Prosper in the Next Emerging Markets Rating: 0 out of 5 stars0 ratingsStabilizing an Unstable Economy Rating: 0 out of 5 stars0 ratingsWhat Caused the Financial Crisis Rating: 5 out of 5 stars5/5Taming Japan's Deflation: The Debate over Unconventional Monetary Policy Rating: 0 out of 5 stars0 ratingsFinance and the Good Society Rating: 4 out of 5 stars4/5Quantitative Portfolio Management: with Applications in Python Rating: 0 out of 5 stars0 ratingsAbolish Money (From Economics)! Rating: 0 out of 5 stars0 ratingsWhy Minsky Matters: An Introduction to the Work of a Maverick Economist Rating: 5 out of 5 stars5/5The Taylor Rule and the Transformation of Monetary Policy Rating: 0 out of 5 stars0 ratingsThe Historical Performance of the Federal Reserve: The Importance of Rules Rating: 0 out of 5 stars0 ratingsThe Money Formula: Dodgy Finance, Pseudo Science, and How Mathematicians Took Over the Markets Rating: 5 out of 5 stars5/5Reality-Driven Investing: Statistics That Make a Difference Rating: 0 out of 5 stars0 ratingsApplied Financial Macroeconomics and Investment Strategy: A Practitioner’s Guide to Tactical Asset Allocation Rating: 0 out of 5 stars0 ratingsInvestors and Markets: Portfolio Choices, Asset Prices, and Investment Advice Rating: 4 out of 5 stars4/5Chicago Price Theory Rating: 0 out of 5 stars0 ratingsThe Second Great Contraction: From This Time Is Different Rating: 4 out of 5 stars4/5Recessions: Volume I Rating: 3 out of 5 stars3/5Discovering Prices: Auction Design in Markets with Complex Constraints Rating: 0 out of 5 stars0 ratingsFragile by Design: The Political Origins of Banking Crises and Scarce Credit Rating: 4 out of 5 stars4/5The Strategic Bond Investor, Third Edition: Strategic Tools to Unlock the Power of the Bond Market Rating: 0 out of 5 stars0 ratingsMoney: Whence It Came, Where It Went Rating: 4 out of 5 stars4/5Portfolio Theory: With Application to Bank Asset Management Rating: 0 out of 5 stars0 ratingsThe Economic Indicator Handbook: How to Evaluate Economic Trends to Maximize Profits and Minimize Losses Rating: 0 out of 5 stars0 ratingsSystematic Fixed Income: An Investor's Guide Rating: 0 out of 5 stars0 ratingsThe Fundamentals of Hedge Fund Management: How to Successfully Launch and Operate a Hedge Fund Rating: 0 out of 5 stars0 ratings
Economics For You
You Can't Lie to Me: The Revolutionary Program to Supercharge Your Inner Lie Detector and Get to the Truth Rating: 4 out of 5 stars4/5The Age of Selfishness: Ayn Rand, Morality, and the Financial Crisis Rating: 4 out of 5 stars4/5Wise as Fu*k: Simple Truths to Guide You Through the Sh*tstorms of Life Rating: 4 out of 5 stars4/5Economics 101: From Consumer Behavior to Competitive Markets--Everything You Need to Know About Economics Rating: 4 out of 5 stars4/5The Intelligent Investor, Rev. Ed: The Definitive Book on Value Investing Rating: 4 out of 5 stars4/5The Richest Man in Babylon: The most inspiring book on wealth ever written Rating: 5 out of 5 stars5/5How to Be Everything: A Guide for Those Who (Still) Don't Know What They Want to Be When They Grow Up Rating: 4 out of 5 stars4/5Bottle of Lies: The Inside Story of the Generic Drug Boom Rating: 4 out of 5 stars4/5Divergent Mind: Thriving in a World That Wasn't Designed for You Rating: 4 out of 5 stars4/5Talking to My Daughter About the Economy: or, How Capitalism Works--and How It Fails Rating: 4 out of 5 stars4/5Chip War: The Fight for the World's Most Critical Technology Rating: 4 out of 5 stars4/5The Sovereign Individual: Mastering the Transition to the Information Age Rating: 4 out of 5 stars4/5Confessions of an Economic Hit Man, 3rd Edition Rating: 5 out of 5 stars5/5The Hard Truth About Soft Skills: Soft Skills for Succeeding in a Hard Wor Rating: 3 out of 5 stars3/5Predictably Irrational, Revised and Expanded Edition: The Hidden Forces That Shape Our Decisions Rating: 4 out of 5 stars4/5The Lords of Easy Money: How the Federal Reserve Broke the American Economy Rating: 4 out of 5 stars4/5Principles for Dealing with the Changing World Order: Why Nations Succeed and Fail Rating: 4 out of 5 stars4/5Quiet Leadership: Six Steps to Transforming Performance at Work Rating: 4 out of 5 stars4/5Sex Trafficking: Inside the Business of Modern Slavery Rating: 4 out of 5 stars4/5Capitalism and Freedom Rating: 4 out of 5 stars4/5Payback: Debt and the Shadow Side of Wealth Rating: 0 out of 5 stars0 ratingsCapital in the Twenty-First Century Rating: 4 out of 5 stars4/5A History of Central Banking and the Enslavement of Mankind Rating: 5 out of 5 stars5/5The Spirit Level: Why Greater Equality Makes Societies Stronger Rating: 4 out of 5 stars4/5A People's Guide to Capitalism: An Introduction to Marxist Economics Rating: 4 out of 5 stars4/5The Peter Principle: Why Things Always Go Wrong Rating: 4 out of 5 stars4/5Getting to Yes with Yourself: (and Other Worthy Opponents) Rating: 4 out of 5 stars4/5
Reviews for Inflation Targeting
0 ratings0 reviews