The Case for Inflation Targeting.
Part of a special issue on Federal Reserve policy in the face of economic crises. The writer explores whether inflation targeting represents a suitable policy for the U.S. Federal Reserve. In order to answer the question, he examines whether the Federal Open Market Committee (FOMC) controls inflat...
| Publicado en: | CATO Journal Vol. 27; no. 2; pp. 273 - 282 |
|---|---|
| Autor principal: | |
| Formato: | Artículo |
| Publicado: |
Cato Institute
Spring/Summer 2007
|
| Materias: | |
| Acceso en línea: | Ver este registro en EBSCOhost |
| Sumario: | Part of a special issue on Federal Reserve policy in the face of economic crises. The writer explores whether inflation targeting represents a suitable policy for the U.S. Federal Reserve. In order to answer the question, he examines whether the Federal Open Market Committee (FOMC) controls inflation, and how the dual mandate of the federal reserve—to promote both stable prices and “maximum employment”—constrains the way the FOMC implements monetary policy. He then examines the assumption that a Phillips curve trade-off exists between unemployment and inflation that is invariant to changes in the systematic behavior of the central bank. The writer concludes that an inflation target is indeed a suitable policy for a central bank and that such a target would improve both the conduct of monetary policy and central bank accountability. |
|---|