Search Results for: inflation target

Yellen on raising the inflation target

It was very surprising to hear Janet Yellen hint in public that there was a good case for raising the inflation target. The economic logic of doing just that is very sound:  if we think that equilibrium real interest rates … Continue reading

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Brief history of time spent inflation targeting

This pulls together tweets that I sent on the history of inflation targeting, having read this article in the New York Times.  Warning:  this is a highly subjective, UK-centric and stream-of-consciousness, and still very brief ‘history’. A key thing to … Continue reading

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Re-specifying the inflation target for low real interest rates

The Fed’s John Williams has commented that the Fed should revisit the inflation target to provide for future episodes in which very low interest rates are needed. This is welcome.  Blanchard, Krugman, and many others have made the same argument. … Continue reading

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Times Op-Ed on raising the inflation target

Here’s a link to my piece in today’s Times, written jointly with Richard Barwell of BNP Paribas.

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How to minimise the credibility damage of a rise in the inflation target

I had an interesting exchange with Malcolm Barr at JP Morgan via email.  He made two points that were food for thought. Both are aimed at finding ways to minimise the risk that a rise in the inflation target was … Continue reading

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Why weak nominal wage growth is of concern to flexible inflation targeters

Today’s UK labour market data show nominal wage growth falling back – to about 2% annual growth, from a local peak last year of 3% – at the same time as the employment rate increases.  This is another important interregnum … Continue reading

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Kocherlakota and the credibility calculus of raising the inflation target

Krugman, Blanchard and others have suggested raising the inflation target as a way to prevent – or at least reduce the severity of – future episodes where the monetary policy interest rate is trapped at zero. This is a position … Continue reading

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Commitment and risk management motives for inflation target overshooting

Yesterday I posted following the BoE Inflation Report press conference, agitated by the repeated emphasis on avoiding an overshoot of the inflation target.  A private response to the post made it clear that I should write again and disentangle two … Continue reading

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Rosengren: A big day for the ‘raise the inflation target’ campaign

I just noticed this article by the FT’s Sam Fleming, in which he writes that Boston Fed President Eric Rosengren has pointed out the potential benefits of raising the US inflation target.  The implication being – as Blanchard, Krugman and … Continue reading

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Cecchetti and Schoenholtz on raising the inflation target

Mark Thoma sent round this interesting post from Cecchetti and Schoenholtz’s blog, [CS] asking whether 2% inflation targets were still appropriate.  In a nutshell, they argue that if central banks were starting over, they should pick a higher number.  But … Continue reading

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