From monetary targeting to inflation targeting

Frederic S. Mishkin

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From monetary targeting to inflation targeting

by Frederic S. Mishkin

2001

World Bank, Financial Sector Strategy and Policy Department

Description

Experience with monetary targeting suggests that although it successfully controlled inflation in Switzerland and especially Germany, the special conditions that made it work reasonably well in those two countries are unlikely to be satisfied elsewhere. Inflation targeting is more likely to improve economic performance in countries that choose to have an independent domestic monetary policy, but there are subtleties in how inflation targeting is done. Lessons from industrial countries should be useful to central banks designing a framework for monetary policy.

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From monetary targeting to inflation targeting was written by Frederic S. Mishkin.

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