The macroeconomic effects of inflation targeting.

From: Federal Reserve Bank of St. Louis Review | Date: July 1, 2004| Author: Levin, Andrew T.; Natalucci, Fabio M.; Piger, Jeremy M. | Copyright information

1. INTRODUCTION

Over the past 15 years, explicit inflation targeting (IT) has been adopted by an increasing number of central banks, and a substantial body of literature has emphasized the advantages of this approach as a framework for monetary policy. (1) Nevertheless, empirical analysis has yielded little evidence of any macroeconomic effects of IT. For example, the landmark study of Bernanke, Laubach, Mishkin, and Posen (1999) concluded that the first few countries to...

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