Monetary targetry: Might Carney make a difference?

Charles A.E. Goodhart, Melanie Baker, Jonathan Ashworth 22 January 2013

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The economic recovery from the 2008/9 crisis has been depressingly slow in the UK, as in many other developed countries. Further fiscal expansion is constrained by concerns about the extraordinary (for peace-time) scale of the public sector deficit and rise in the debt/GDP ratio. Hence politicians, and many other commentators, are looking to monetary policy to play an even more aggressive role in getting us out of our present stagnation.

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Topics:  Monetary policy

Tags:  Bank of England, nominal GDP targeting

Central banks can phase in nominal GDP targets without damaging the inflation anchor

Jeffrey Frankel 19 December 2012

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The time is right for the world’s central banks to reconsider the framework they use in conducting monetary policy. The US Federal Reserve and the ECB are still grappling with sustained economic weakness, despite years of low interest rates. In Japan, Shinzō Abe, the new prime minister from the Liberal Democratic Party (LDP), was elected on the promise of a new, more expansionary monetary policy (Financial Times 2012). In the UK, Mark Carney, the incoming Governor of the Bank of England, is open to new thinking.

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Topics:  Monetary policy

Tags:  inflation targeting, monetary policy, nominal GDP targeting

The death of inflation targeting

Jeffrey Frankel 19 June 2012

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It is with regret that we announce the death of inflation targeting. The monetary regime, known affectionately as “IT” to its friends, evidently passed away in September 2009. That the demise of IT has not been officially announced until now testifies to the esteem in which it was widely held, its usefulness as a figurehead for central banks, and fears that there might be no good candidates to assume its position as preferred anchor for monetary policy.

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Topics:  Macroeconomic policy Monetary policy

Tags:  inflation targeting, nominal GDP targeting

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