Why inflation targeting is an inexact science

This article says in the past stronger-than-expected growth might have been a good reason to raise interest rates but if, today, stronger than expected growth results from the same process as lower-than-expected inflation, all our cherished assumptions begin to collapse around us. One important conclusion is that inflation targeting becomes an increasingly inexact science, the article claims.

First published in the Independent, UK on 15 September 2003. The author, Stephen King, is managing

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