Riksbank paper looks at scrapping inflation target in favour of nominal GDP
The Sveriges Riksbank today published a working paper questioning whether the inflation target would be better replaced by a nominal GDP (NGDP) level target, concluding that inflation targeting should be kept but would benefit from refinement.
In Nominal GDP Targeting and the Zero Lower Bound: Should We Abandon Inflation Targeting?, author Roberto Billi begins by testing the two targets under central bank discretion at the zero lower bound. He finds that inflation targeting leaves the economy
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