Speed limit policies versus inflation targeting: A free lunch?

Arbeitspapier

Inflation targeting is currently popular with central banks. Is this popularity justified? I investigate this question by comparing a speed limit policy and inflation targeting with a Lucas-type Phillips curve capturing output gap persistence. If the output gap is at least moderately persistent, a speed limit policy can: (1) partly eliminate the statecontingent inflation bias, and (2) reduce inflation variability at no output gap variability cost.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Cardiff Economics Working Papers ; No. E2008/20

Classification and Topics

• Classification: Wirtschaft ; Monetary Policy, Central Banking, and the Supply of Money and Credit: General ; Monetary Policy ; Central Banks and Their Policies
• Subject: inflation targeting ; speed limit policy ; inflation bias ; discretion ; stabilisation ; Geldpolitik ; Inflation Targeting ; Neue klassische Makroökonomik

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Hatcher, Michael C.
• Event: Veröffentlichung
• (who): Cardiff University, Cardiff Business School
• (where): Cardiff
• (when): 2008

Further information

• Handle: http://hdl.handle.net/10419/65805
• Last update: 10.03.2025, 11:42 AM CET