Book contents
- Frontmatter
- Contents
- List of Figures
- List of Tables
- Preface
- 1 The Institutional Make-Up and Evolution of Central Bank–Government Relations: An Introduction
- 2 Legislation Alone Does Not a Central Bank Make: Political Structure, Governance, and Reputation in Monetary Policy
- 3 Central Bank Personalities and Monetary Policy Performance
- 4 Econometric Analysis of Central Bank Behavior: An Evolutionary Approach
- 5 Contrasting Quantitative and Qualitative Assessments of Central Bank Behavior and the Evolution of Monetary Policies
- 6 Accountability, Disclosure, and Conflict Resolution
- 7 Inflation Targets versus Other Inflation Control Measures: Two Sides of the Same Coin?
- 8 The Changing Face of Central Banking: Epilogue
- Bibliography
- Index
- Titles in the series
7 - Inflation Targets versus Other Inflation Control Measures: Two Sides of the Same Coin?
Published online by Cambridge University Press: 27 October 2009
- Frontmatter
- Contents
- List of Figures
- List of Tables
- Preface
- 1 The Institutional Make-Up and Evolution of Central Bank–Government Relations: An Introduction
- 2 Legislation Alone Does Not a Central Bank Make: Political Structure, Governance, and Reputation in Monetary Policy
- 3 Central Bank Personalities and Monetary Policy Performance
- 4 Econometric Analysis of Central Bank Behavior: An Evolutionary Approach
- 5 Contrasting Quantitative and Qualitative Assessments of Central Bank Behavior and the Evolution of Monetary Policies
- 6 Accountability, Disclosure, and Conflict Resolution
- 7 Inflation Targets versus Other Inflation Control Measures: Two Sides of the Same Coin?
- 8 The Changing Face of Central Banking: Epilogue
- Bibliography
- Index
- Titles in the series
Summary
INTRODUCTION
This study has documented and traced the evolution of central bank policies and institutions since World War II. Evolution describes well the process by which monetary policy has changed over time and the forces that reshaped the institutional relationship between central banks and government on the one hand, and the public on the other. In essence the current state of affairs recognizes the role of inflation as the fulcrum of monetary policy more explicitly than has heretofore been possible or even desirable. The reason has to do with a search for a coherent policy framework in which monetary policy could operate. Through experimentation policy makers have concluded that, to date, the most coherent policy framework is to focus on some inflation objective.
Indeed, as this is written, it is becoming increasingly commonplace for central banks to adopt some kind of inflation objective. Whether as a guideline, or via more formal mechanisms, inflation targeting certainly strikes some as taking on a kind of flavor-of-the-month role among the existing menu of monetary policy frameworks. While it is difficult to find instances of central banks that did not have some kind of inflation control objective in mind throughout their history, the performance of inflation since the end of World War II lends credence to the view that good intentions alone in the realm of inflation are not enough. Either the hands of central bankers need somehow to be tied or the institutional relationship between the state and the central bank was flawed because, more often than not, central banks have not been able to deliver low and stable inflation rates for long stretches of time.
- Type
- Chapter
- Information
- The Changing Face of Central BankingEvolutionary Trends since World War II, pp. 265 - 299Publisher: Cambridge University PressPrint publication year: 2002