Inflation Targeting: A New Framework for Monetary Policy?

Ben S. Bernanke and Frederic Mishkin ()

No 5893, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: In recent years a number of industrialized countries have adopted a strategy for monetary policy known as `inflation targeting.' We describe how this approach has been implemented in practice and argue that it is best understood as a broad framework for policy, which allows the central bank `constrained discretion,' rather than as an ironclad policy rule in the Friedman sense. We discuss the potential of the inflation-targeting approach for making monetary policy more coherent and transparent, and for increasing monetary policy discipline. Our final section addresses some additional practical issues raised by this approach.

JEL-codes: E5 E58 (search for similar items in EconPapers)
Date: 1997-07
Note: EFG ME
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Journal Article: Inflation Targeting: A New Framework for Monetary Policy? (1997)
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