Central-bank credibility, reputation and inflation targeting in historical perspective

Michael Bordo, Pierre Siklos 12 December 2014

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Central banks have been around since the 17th century. Central bank credibility has waxed and waned during this period. In many countries, an important contributor to the achievement of credibility has been the introduction of inflation targeting.

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Topics:  Monetary policy

Tags:  inflation targeting, central bank credibility

Liquidity and foreign asset management challenges for Latin American countries

Joshua Aizenman, Daniel Riera-Crichton 28 November 2014

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The Global Financial Crisis (GFC) validated the buffer value of international reserves and the active management of buffer funds. These issues are especially pertinent for commodity exporters, for whom the high volatility of commodity terms of trade translates into large shocks that impact the real exchange rate and GDP.  

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Topics:  Global crisis International finance

Tags:  GFC, SWFs, sovereign welfare funds, inflation targeting

Central banks in developing countries should consider targeting nominal GDP

Pranjul Bhandari, Jeffrey Frankel 21 August 2014

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Central banks still seek transparent and credible communication. But signalling intentions, through forward guidance or some degree of commitment to an intermediate target, poses a difficult tradeoff. The advantages of transparency and credibility versus the disadvantages of waking up one day to find that unexpected developments have turned past statements into unwanted constraints on current monetary policy.

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Topics:  Monetary policy

Tags:  inflation targeting, emerging markets, NGDP targeting

The evolving effectiveness of UK’s monetary policy

Colin Ellis, Haroon Mumtaz, Pawel Zabczyk 06 August 2014

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Over the past five decades, major industrialised economies underwent deep structural changes. These typically included dramatic shifts in macroeconomic policy and globalisation-induced changes in competition, technological advances, and financial innovation. This raises several concerns for policymakers, including whether the channels through which monetary policy affects the economy have changed over time, and what that might mean for how policy should be conducted.

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Topics:  Europe's nations and regions Monetary policy

Tags:  inflation targeting, UK, policy shocks

The euro crisis: Muddling through, or on the way to a more perfect euro union?

Joshua Aizenman 03 July 2014

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The short history of the Eurozone has been remarkable and unprecedented – the euro project has moved from the planning board to a vibrant currency within less than ten years. Otmar Issing’s optimistic speech in 2006 reflects well the buoyant assessment of the first decade of the euro – an unprecedented formation of a new currency without a state.1 Observers viewed the rapid acceptance of the euro as a viable currency and the deeper financial integration of the Eurozone and the EU countries as stepping stones toward a stable and prosperous Europe.

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Topics:  Institutions and economics International finance Monetary policy

Tags:  Germany, ECB, eurozone, inflation targeting, euro, institutions, Eurozone crisis, GIIPS

Inflation targeting vs price-level targeting: A new survey of theory and empirics

Michael Hatcher, Patrick Minford 11 May 2014

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Price stability is the key goal of almost every central bank in the world. But does that mean stable price levels or inflation rates? The main difference between inflation targeting and price-level targeting is the consequence of missing the target.

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Topics:  Monetary policy

Tags:  inflation targeting, price-level targeting, rational expectation, zero bound

Monetary policy in the UK: Time for change?

David Cobham 16 September 2013

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Before the Global Crisis it seemed as though the problems of monetary policy in the UK had been solved:

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Topics:  Monetary policy

Tags:  inflation targeting, Bank of England, UK, QE

Is the Riksbank neglecting the price-stability objective, counteracting full employment, and increasing household debt?

Lars E.O. Svensson 09 September 2013

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How do we know whether or not the Riksbank is neglecting the price-stability objective? Could it be that the Riksbank is not only neglecting the price-stability objective but is also counteracting the Riksdag’s and the Government’s full-employment objective as well as increasing household indebtedness?

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Topics:  Monetary policy

Tags:  inflation targeting, Riksbank

The case for 4% inflation

Laurence Ball 24 May 2013

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Many central banks have adopted a common policy – an inflation target near 2%. These central banks include the Fed (which calls it a ‘long run goal’), the ECB (which targets inflation ‘below, but close to 2%’) and the central banks of most other advanced economies.

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Topics:  Monetary policy

Tags:  inflation targeting, 2%

Is inflation targeting dead? Central banking after the Crisis

Lucrezia Reichlin, Richard Baldwin 14 April 2013

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Before the Crisis, inflation targeting had become the de facto standard framework for monetary policy. Even non-inflation targeters like the ECB and the Federal Reserve built their monetary policy around the idea of commitment to a quantitative objective for medium-term inflation.

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Topics:  EU institutions Macroeconomic policy

Tags:  inflation targeting, central bank independence, quantitative easing

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