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The Inflation Forecast

Published online by Cambridge University Press:  26 March 2020

C. A. E. Goodhart
C. A. E. Goodhart*
Affiliation:
Financial Markets Group, London School of Economics
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Abstract

Given the long and variable time lags between interest rate changes and responses in output and inflation, an inflation forecast must lie at the heart of monetary policy. In the UK the Bank's inflation forecast and Report were developed when the interest rate decision still lay with the Chancellor. Its, largely unchanged, continuation has led to certain tensions once that decision was delegated to a Monetary Policy Committee of independently responsible experts. In this paper the question is raised whether such a Committee should be jointly and individually responsible for the inflation forecast, and what might be considered as alternative procedures.

Type
Research Article
Information
National Institute Economic Review , Volume 175 , January 2001 , pp. 59 - 66
Copyright
Copyright © 2001 National Institute of Economic and Social Research

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