What role for inflation targeting?

Former executive director of the Reserve Bank of India, A. Vasudevan, asks whether inflation targeting or multiple objective targeting should be of concern only to central banks. He argues that, generally speaking, monetary policy needs to be supported by fiscal policy to be truely effective.

The inflation rate based on the increase in the wholesale price index for "all commodities'' has recently crossed the 4 per cent mark on a year-on-year basis. This may not turn out to be a matter of

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