Inflation targeting should be improved, not replaced, RBA paper says
Central banks should avoid a 'fundamental re-engineering' of their mandates
Phillips curves have flattened in the years since inflation targeting was first adopted, leading to calls for a mandate that pays more attention to growth, but a research discussion paper, published today (August 25) by the Reserve Bank of Australia (RBA), argues such calls are premature.
Inflation targeting: a victim of its own success?, by Christian Gillitzer and John Simon, warns inflation targeting's success is a poor reason to argue for its replacement, either with a dual mandate or a
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