Sentences with phrase «inflation target»

The past two decades have seen the increasingly widespread adoption of inflation targeting as the framework for monetary policy.

That's certainly plausible, but the last figure shows that they've been missing their 2 percent inflation target for years now.

This could best be accomplished, it was thought, by firmly establishing the political independence of central banks and by setting inflation targets in order to control expectations.

This move was what the flexible inflation targeting framework suggests should happen.

The 2 % intermediate - term inflation target's very important.

This is particularly important given that our monetary policy is based on inflation targeting.

It's 16 times more likely that you'll be at the zero lower bound with a zero per cent inflation target, versus a two per cent target.

First, the most direct attack on low r - star would be for central banks to pursue a somewhat higher inflation target.

The flexible inflation target served as a useful framework to think about the Asian crisis.

Central banks control the money supply and set inflation targets.

But in the 1990s, many central banks adopted inflation targeting, a simpler alternative.

Q: You decided to renew the five - year inflation target more or less as is and not tighten it as some analysts had been hoping.

The irony is that when we first started talking about inflation targeting, it was our insistence on that very flexibility that made people think we weren't serious.

However, the pace of easing should take into account the presence of external risks and the need to build credibility under the newly introduced inflation targeting regime.

He also wants an explicit inflation target of 2 - 3 %.

However, a month ago I pointed out some reasons to wonder whether inflation targeting might be going out of style.

However, the 2 % inflation target remained out of reach and doubts about the sustainability and ultimate success of the program remained.

So, you are saying the price inflation target applies to the lender of last resort function, right?

A lower inflation target means lower nominal interest rates, and when the crisis hit, central banks had little room to cut rates before effectively hitting zero.

If we can achieve something like that outcome, that would still be consistent in every essential respect with the experience under inflation targeting since it began 15 years or so ago.

It was a plausible alternative when inflation targets became common in the 1990s.

Inflation targeting countries also do not have current accounts or international reserves that look different from other countries.

The theory is called inflation targeting, and it has dominated the thinking of central banks in developed countries for two decades.

For another, inflation targeting no longer enjoys the broad support it once had among policy analysts.

And more importantly, for most of its history inflation targeting has simply worked.

Should inflation targeting lose its appeal more broadly, this would not be surprising — the list of retired monetary theories is long.

A large number of industrial and a growing number of developing countries now have domestic inflation targets administered by independent and transparent central banks.

These approaches have a number of potential advantages over standard inflation targeting.

Many central banks have now adopted numerical inflation targets and others have clearly become more focused on inflation control even without adopting explicit targets.

When you put it this way, it's a wonder why inflation targeting was chosen in the first place.

So it has to manage inflation expectations verbally, while also backing away from its preferred inflation targets and accepting higher ones instead.

All of the argument about appropriate inflation targeting in recent years has focused not on whether 2 percent is too high but on whether it is too low a target.

Together, this could mean a greater risk in the future of hitting the effective lower bound for interest rates for any given inflation target.

This system of inflation targeting has been very beneficial for the overall economy.

There is the further point that the logic that led to the adoption of the 2 percent inflation target years ago suggests that it is too low now.

Inflation targets in the region are not expected to be reached and monetary stimulation could continue for longer than expected.

All of this is in the context of a framework for monetary policy — a medium - term inflation target — which is I think well understood.

The next mandate will essentially be the same as the existing two per cent inflation target, with perhaps some additional language about the importance of financial market stability.

All of the factors pointing towards a higher inflation target have gained force in recent years.

The framework for monetary policy is a medium - term, flexible inflation target.

The public might rightly wonder whether inflation targets might shift up again at some future point as other problems arose.

In part this reflects the starting point of many central banks that adopted inflation targeting: they generally had a poor inflation history and low credibility with the public and financial markets.

Due to the fact that the Federal Reserve (a.k.a. «the Fed») has hit inflation targets as well as employment targets, and due to the reality that the Fed needs to get the overnight lending rate higher to have some ammunition to fight a future recession, the short end of the yield curve is going to keep climbing.

First, as B&R show, the Fed has been missing their 2 percent inflation target for about four years running.

Opponents claimed that it would lead to a poorly co-ordinated economic policy and could potentially lead to conflict in fiscal and monetary policy aims, resulting in particular from an over-emphasis in setting rates to meet inflation targets at the expense of other factors such as the exchange rate.

As Chart 2 shows, policy rates in Canada have on average been only 0.25 % higher than the US (using quarterly observations) since the introduction of inflation targeting from the Bank of Canada in 1992.

Take away: Though economic conditions have been improving for the world's third - largest economy, constantly missed inflation targets pose challenges for the BOJ.

In this respect, Mervyn King (1997) has characterised inflation targeting as «trust building by talk» (see also Kuttner and Posen 1999).

If they remain at current levels, the BoC will have to think seriously about lowering its overnight rate, not raising it, to achieve a two - per - cent inflation target over the medium term.