Inflation Targeting

Inflation Targeting

by Edwin M. M. Truman
     
 
Truman (a former assistant secretary of the Treasury for international affairs during the Clinton presidency) promotes inflation targeting as a sound framework for conducting monetary policy through central banks. Inflation targeting, in his formulation, consists of an emphasis on price stability, numerical targeting of prices, time horizons for reaching targets, and

Overview

Truman (a former assistant secretary of the Treasury for international affairs during the Clinton presidency) promotes inflation targeting as a sound framework for conducting monetary policy through central banks. Inflation targeting, in his formulation, consists of an emphasis on price stability, numerical targeting of prices, time horizons for reaching targets, and ongoing review of targeting. He optimistically discusses the implications of wide-scale adoption of inflation targeting and the structure and functioning of the international financial system. Annotation ©2004 Book News, Inc., Portland, OR

Editorial Reviews

Foreign Affairs
A century ago, national currencies were linked to gold or silver. Starting in the 1930s, they were linked to major currencies, a practice formalized in 1944 at Bretton Woods. That system broke down in 1973, and ever since countries have floundered looking for a new "anchor" for monetary policy. The U.S. answer has been to appoint a committee of experienced individuals to manage the monetary aspects of the national economy. But that solution is not satisfying to some and, in any case, cannot work in countries with a history of monetary turbulence or a corrupt political culture. Since 1989, 22 countries have instead focused on targeting the domestic rate of inflation. Truman, a former official of the Federal Reserve, reviews the basic arguments for and against this kind of inflation-targeting and evaluates economic performance under such a system. He offers much useful discussion of the formulation of monetary policy by various central banks and how inflation influences the process. Truman emerges sympathetic to (but unenthusiastic about) inflation-targeting as a strategy.

Product Details

ISBN-13:
9780881323450
Publisher:
Peterson Institute for International Economics
Publication date:
10/27/2003
Edition description:
New Edition
Pages:
288
Product dimensions:
5.90(w) x 8.90(h) x 0.60(d)

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