Inflation Targeting: Some Extensions

Lars Svensson

No 625, Seminar Papers from Stockholm University, Institute for International Economic Studies

Abstract: Previous analysis of the implementation of inflation targeting is extended to monetary policy responses to different shocks, consequences of model uncertainty, effects of interest rate smoothing and stabilization, a comparison with nominal GDP targeting, and implications of forward-looking behavior. Model uncertainty, output stabilization, and interest rate stabilization or smoothing all call for a more gradual adjustment of the conditional inflation forecast toward the inflation target. The conditional inflation forecast is the natural intermediate target during inflation targeting.

Keywords: inflation targeting; monetary policy; shocks; model uncertainty; interest rate smoothing; conditional inflation forecast (search for similar items in EconPapers)
JEL-codes: E42 E52 E58 (search for similar items in EconPapers)
Pages: 44 pages
Date: 1997-10-31
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Citations: View citations in EconPapers (106)

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Related works:
Journal Article: Inflation Targeting: Some Extensions (1999)
Working Paper: Inflation Targeting: Some Extensions (1997)
Working Paper: Inflation Targeting: Some Extensions (1997)
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Persistent link: https://EconPapers.repec.org/RePEc:hhs:iiessp:0625

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