Inflation Targeting: A Critical Appraisal

Philip Arestis and Malcolm Sawyer ()

Macroeconomics from University Library of Munich, Germany

Abstract: Since the early 1990s, a number of countries have adopted Inflation Targeting (IT) in an effort to reduce inflation. Most literature has praised IT as a superior framework of monetary policy. We suggest that IT is a major policy prescription closely associated with the New Consensus Macroeconomics (NCM). Focusing mainly on the IT aspects of the NCM, we address and assess the theoretical foundations of IT, and then assess the empirical work on IT, distinguishing between work that utilizes structural macroeconomic models and work based on single- equation techniques. The IT theoretical framework and the available empirical evidence do not appear to support the views of IT proponents.

Keywords: monetary policy; infaltion targeting; interest rates; channels of monetary policy (search for similar items in EconPapers)
JEL-codes: E31 E52 (search for similar items in EconPapers)
Pages: 30 pages
Date: 2003-09-22
New Economics Papers: this item is included in nep-cba, nep-lam, nep-mon, nep-pke and nep-rmg
Note: Type of Document - word; prepared on PC; to print on HP/PostScript; pages: 30; figures: included
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Citations: View citations in EconPapers (16)

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Related works:
Working Paper: Inflation Targeting: A Critical Appraisal (2003)
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Persistent link: https://EconPapers.repec.org/RePEc:wpa:wuwpma:0309015

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