Inflation, Price Stability, and Monetary Policy: On the Legality of Inflation Targeting by the Eurosystem

Helmut Siekmann

Chapter Chapter 8 in Inflation and Deflation in East Asia, 2023, pp 125-146 from Springer

Abstract: Abstract The term “inflation” is never used by the primary law of the European Union when unfolding tasks, objectives, and instruments of monetary policy. Only by re-defining its primary objective “maintain price stability” could the Eurosystem construe an “inflation target” as its legal goal in this way, eschewing to fall back on Article 127(5) TFEU, which would also demonstrate this aberration when interpreted correctly. To sum up, inflation targeting, as a task, competence, or objective of the Eurosystem, is—legally—highly questionable according to the common standards of interpretation, if it would imply striving for an increase of price levels greater than zero. It might, however, be safe to predict that the Court of Justice of the European Union would disagree.

Date: 2023
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Working Paper: Inflation, price stability, and monetary policy: On the legality of inflation targeting by the Eurosystem (2022)
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DOI: 10.1007/978-3-031-27949-2_8

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