Inflation targeting’s time may be over, Adam Posen says
Posen says changes to global economy may necessitate complete rethinking of monetary policy
Adam Posen said banks need to begin rethinking average inflation targeting due to drastic recent changes in the global economy.
Posen, president of the Peterson Institute for International Economics, said the future economy would experience “high-frequency negative supply shocks”. That, he said, was “a very different world than the world which inflation targeting was designed for”.
Speaking on a media call on August 23, Posen, a former voting member of the Bank of England’s monetary policy
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