Special issue of the Economic Review: 20 years of inflation targeting
Date
22/11/2013
This issue of the Economic Review contains the papers discussed at an international conference organised by the Riksbank in June 2013 to mark 20 years of inflation targeting in Sweden.
The papers and discussions concerned a number of important questions:
How should monetary policy manage the trade-off between stabilising inflation around the target and stabilising the real economy (for instance, unemployment)?
Should monetary policy, in addition to the objectives of stable inflation and a stable real economy, also have an objective of reducing the risk of financial crises?
How should central banks communicate in the best possible way their assessment of future monetary policy to the general public?
Does the globalisation of banks and financial markets limit the possibility for independent monetary policy in individual countries?
The conference organisers Claes Berg, Kerstin Hallsten, Virginia Queijo von Heideken and Ulf Söderström summarise the papers and the discussion at the conference in the introductory article Two decades of inflation targeting: main lessons and remaining challenges . They also contribute with their own reflections regarding some of the difficult questions at the centre of the discussions.
Professor Lars E.O. Svensson, deputy governor of the Riksbank from May 2007 to May 2013, summarises his experiences from the Riksbank in Some Lessons from Six Years of Practical Inflation Targeting .
Michael Woodford, professor at Columbia University and scientific adviser to the Riksbank, discusses how central banks with inflation targets should communicate their policy intentions in Forward Guidance by Inflation-Targeting Central Banks .
Frank Smets, Director General of the Directorate General Research of the
European Central Bank, ECB, analyses how monetary policy is affected by financial imbalances and the introduction of new macroprudential tools in Financial Stability and Monetary Policy: How Closely Interlinked?
Linda Goldberg, Vice President of Financial Intermediation at the Federal Reserve Bank of New York, discusses how the globalisation of banks has affected the possibility to conduct independent monetary policy in Banking Globalization, Transmission, and Monetary Policy Autonomy .
