Stick to inflation targeting, Grimes tells central banks
Central banks targeting more than one variable "face real problems", according to the former chairman of the central bank that pioneered inflation targeting a quarter of a century ago, the Reserve Bank of New Zealand (RBNZ).
Arthur Grimes, who was chief economist around the time the RBNZ started explicitly to target inflation, explains in an interview with CentralBanking.com the thinking behind an inflation targeting (IT) regime – and how the same maxims hold true for central banks today.
The
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