Inflation Targeting as a Monetary Policy Rule

Lars E.O Svensson
Institute for International Economics Studies, Stockholm University

First Draft: May 1998
This Version: December 1998

 

Abstract

The purpose of the paper is to survey and discuss inflation targeting in the context of monetary policy rules. The paper provides a general conceptual discussion of monetary policy rules, attempts to clarify the essential characteristics of inflation targeting, compares inflation targeting to monetary targeting and nominal-GDP targeting, and draws some conclusions for the monetary policy of the European System of Central Banks.

JEL Classification: E42, E52.

Keywords: Intermediate targets, monetary targeting, ECB.

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