Post Inflation Targeting Monetary Policy: A Study of Britain, Japan and the United

There is now considerable disquiet about the appropriate monetary strategy that central banks should follow in the aftermath of the global financial crisis. Several influential commentators have called for the abandonment of inflation targeting. Empirical research examining three major economies demonstrates that inflation targeting was effective prior to the crisis and a more flexible form of targeting may still be appropriate after the crisis.
JEL Classification E52, E58, E65
Full Article
  1. Alesina, A. and Summers, L., 1993. Central Bank Independence and Macroeconomic Performance: Some Comparative Evidence. Journal of Money Credit and Banking, 25, pp. 151-162
  2. Bernanke, B. and Mishkin, F., 1997. Inflation Targeting: A New Framework for Monetary Policy, Journal of Economic Perspectives, spring, 11(2), pp. 97-116
  3. Blanchard, O, DellAriccia, G & Mauro, P., 2010. Rethinking Macroeconomic Policy. Journal of Money, Credit and Banking, 42(6), supplement, pp. 199 – 215
  4. Bosede, ND. 2004. Inflation Targeting Framework for Jamaica: An Empirical Exploration, Research Discussion Paper, Bank of Jamaica, July
  5. Debelle, G. and Fischer, S., 1995. How Independent Should a Central Bank Be?, in Goals, Guidelines and Constrains Facing Monetary Policymakers, edited by Fuhrer, J., Federal Reserve Bank of Boston, pp. 195-221
  6. Friedman, M., 1968. The Role of Monetary Policy. American Economic Review, 58(1), March, pp. 1-17
  7. Friedman, M. and Jacobson Schwartz, A., 1963. A Monetary History of the United States 1867- 1960. Princeton University Press, Princeton
  8. Goodhart, C., 2013. Central Banks Asked to Walk Inflations Razor Edge. Financial Times, 31 January
  9. Hordick, R. J. And Prescott, E. C., 1997. Post-War US Business Cycles: An Empirical Investigation. Journal of Money, Credit and Banking, 29, pp. 1-16
  10. Kydland, F. and Prescott, E., 1977. Rules Rather than Discretion: The Inconsistency of Optimal Plans. Journal of Political Economy, 85, June, pp. 473-491
  11. McCullum, B., 1996. Inflation Targeting in Canada, New Zealand, Sweden, the United Kingdom, and in General, NBER working Paper, 5579
  12. Mishkin, F. and Posen, A., 1997. Inflation Targeting: Lessons from Four Countries, Economic Policy Review, Federal Reserve Bank of New York, 3(3), August
  13. Monadjemi, M. S., 2011. Monetary Policy and Oil Prices. Global Economy Journal, 11(3), pp. 1-16
  14. Monadjemi, M. and Kearney, C., 1990. Deregulation and the Conduct of Monetary Policy. Economic and Labour Relation Review, December, pp. 18-33
  15. Oechsle, T., 2013. A Monetary and Fiscal Framework for Macroeconomic Stability in the European Monetary Union. Real World Economics Review, 65, pp. 51-64
  16. Phelps, E., 1968. Money Wage Dynamics and Labour Market Equilibrium. Journal of Political Economy, 76(4), July/August, pp. 678-711
  17. Poole, W., 1970. Optimal Choice of Monetary Instruments in a Simple Stochastic Macro Model. Quarterly Journal of Economics, 84, May, pp. 197-216
  18. Posen, A., 1995. Declaration Are Not Enough: Financial Sector sources of Central Bank Independence. NBER Macroeconomic Annual, pp. 253-274
  19. Rogoff, K., 1985. The Optimal Degree of Commitment to an Intermediate Monetary Target. Quarterly Journal of Economics, 100, November, pp. 1169-1189
  20. Svensson, L., 1999. Inflation Targeting as a Monetary Policy Rule. Journal of Monetary Economics, 43, pp. 607-654
  21. Woodford, M., 2012. Inflation Targeting and Financial Stability. NBER Working Paper Series, Working Paper 17967, April
  22. Woodford, M., 2013. Monetary Policy Targets after the Crisis, in IMF Rethinking Macro Policy II: First Steps and Early Lessons Conference, April 16-17, 2013, Washington, DC

Article Rights and License
© 2014 The Authors. Published by Sprint Investify. ISSN 2359-7712. This article is licensed under a Creative Commons Attribution 4.0 International License. Creative Commons License
Corresponding Author
Mehdi Siamak Monadjemi, Australian School of Business, University of New South Wales, Sydney, Australia
Download PDF


University of New South Wales, Australia S P Jain School of Global Management

Mehdi Siamak MONADJEMI
University of New South Wales, Australia