Inflation Forecast Targeting: Implementing and Monitoring Inflation Targets

Lars Svensson

No 1511, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: Inflation targeting is shown to imply inflation forecast targeting; the central bank’s inflation forecast becomes an explicit intermediate target. Inflation forecast targeting simplifies both implementation and monitoring of monetary policy. The weight on output stabilization determines how quickly the inflation forecast is adjusted towards the inflation target. Money growth or exchange rate targeting is generally inferior than inflation targeting and leads to higher inflation variability. Commitment to ‘target rules’ may be better than commitment to ‘instrument rules’.

Keywords: Monetary; Policy; Regimes (search for similar items in EconPapers)
JEL-codes: E42 E52 E58 (search for similar items in EconPapers)
Date: 1996-11
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Citations: View citations in EconPapers (61)

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Related works:
Journal Article: Inflation forecast targeting: Implementing and monitoring inflation targets (1997)
Working Paper: Inflation Forecast Targeting: Implementing and Monitoring Inflation Targets (1997)
Working Paper: Inflation Forecast Targeting: Implementing and Monitoring Inflation Targets (1996)
Working Paper: Inflation Forecast Targeting: Implementaing and Monitoring Inflation Targets (1996)
Working Paper: Inflation Forecast Targeting: Implementing and Monitoring Inflation Targets (1996)
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