Inflation targeting, pricepath targeting, and output variability.pdf英文资料.pdfVIP

This PDF is a selection from a published volume from the National Bureau of Economic Research Volume Title: The Inflation-Targeting Debate Volume Author/Editor: Ben S. Bernanke and Michael Woodford, editors Volume Publisher: University of Chicago Press Volume ISBN: 0-226-04471-8 Volume URL: /books/bern04-1 Conference Date: January 23-26, 2003 Publication Date: December 2004 Title: Inflation Targeting, Price-Path Targeting, and Output Variability Author: Stephen G. Cecchetti, Kim URL: /chapters/c9558 4 Inflation Targeting, Price-Path Targeting, and Output Variability Stephen G. Cecchetti and Junhan Kim 4.1 Introduction The 1990s were amazing in many ways. Not only did the internet and cel- lular phones come into widespread use, but overall economic conditions improved nearly everywhere we look. Growth was higher, inflation was lower, and both were more stable. In the United States, for example, infla- tion fell from 6 percent at the beginning of the decade to less than 2 percent by the end. Meanwhile real growth rose from less than 3 percent to over 4 percent. Volatility declined, too. The American case is the most dramatic instance of what has really been a worldwide trend.1 And while these im- provements in economic performance could have been the consequence of the world being calmer, Cecchetti, Flores-Lagunes, and Krause (2002) ar- gue that roughly three-quarters of it can be explained by better monetary policy. That is, central bankers did a better job of stabilizing inflation at low levels while keeping growth high. Making better monetary policy is not just a problem of finding compe- tent central bankers. In fact, there is a history of central bankers who tried to do their jobs but were thwarted by politicians. Over the years we have Stephen G. Cecchetti is professor of international economics and finance at Brandeis Uni- versity and a resea