Book contents
- Frontmatter
- Contents
- List of figures
- List of tables
- List of contributors
- 1 Introduction
- 2 Welcome remarks: a Norwegian perspective
- 3 Reflections on inflation targeting
- 4 Inflation targeting at twenty: achievements and challenges
- 5 Inflation targeting twenty years on: where, when, why, with what effects and what lies ahead?
- 6 How did we get to inflation targeting and where do we need to go to now? A perspective from the US experience
- 7 Inflation control around the world: why are some countries more successful than others?
- 8 Targeting inflation in Asia and the Pacific: lessons from the recent past
- 9 Inflation targeting and asset prices
- 10 The optimal monetary policy instrument, inflation versus asset price targeting, and financial stability
- 11 Expectations, deflation traps and macroeconomic policy
- 12 Heterogeneous expectations, learning and European inflation dynamics
- 13 Inflation targeting and private sector forecasts
- 14 Inflation targeting, transparency and inflation forecasts: evidence from individual forecasters
- 15 Gauging the effectiveness of quantitative forward guidance: evidence from three inflation targeters
- 16 Macro-modelling with many models
- 17 Have crisis monetary policy initiatives jeopardised central bank independence?
- 18 Inflation targeting: learning the lessons from the financial crisis
- 19 The financial crisis as an opportunity to strengthen inflation-targeting frameworks
- 20 ‘Leaning against the wind’ is fine, but will often not be enough
- 21 Inflation targeting, capital requirements and ‘leaning against the wind’: some comments
- Index
14 - Inflation targeting, transparency and inflation forecasts: evidence from individual forecasters
Published online by Cambridge University Press: 05 October 2010
- Frontmatter
- Contents
- List of figures
- List of tables
- List of contributors
- 1 Introduction
- 2 Welcome remarks: a Norwegian perspective
- 3 Reflections on inflation targeting
- 4 Inflation targeting at twenty: achievements and challenges
- 5 Inflation targeting twenty years on: where, when, why, with what effects and what lies ahead?
- 6 How did we get to inflation targeting and where do we need to go to now? A perspective from the US experience
- 7 Inflation control around the world: why are some countries more successful than others?
- 8 Targeting inflation in Asia and the Pacific: lessons from the recent past
- 9 Inflation targeting and asset prices
- 10 The optimal monetary policy instrument, inflation versus asset price targeting, and financial stability
- 11 Expectations, deflation traps and macroeconomic policy
- 12 Heterogeneous expectations, learning and European inflation dynamics
- 13 Inflation targeting and private sector forecasts
- 14 Inflation targeting, transparency and inflation forecasts: evidence from individual forecasters
- 15 Gauging the effectiveness of quantitative forward guidance: evidence from three inflation targeters
- 16 Macro-modelling with many models
- 17 Have crisis monetary policy initiatives jeopardised central bank independence?
- 18 Inflation targeting: learning the lessons from the financial crisis
- 19 The financial crisis as an opportunity to strengthen inflation-targeting frameworks
- 20 ‘Leaning against the wind’ is fine, but will often not be enough
- 21 Inflation targeting, capital requirements and ‘leaning against the wind’: some comments
- Index
Summary
[T]he most important distinguishing characteristic of inflation target regimes is the emphasis that they place on transparency and accountability.
Mervyn King (1997: 439)Introduction
The consensus view among policymakers and academics alike is that the introduction of inflation targeting increases the transparency of monetary policymaking (King 1997; Bernanke et al. 1999; Svensson 1999; Mishkin and Schmidt-Hebbel 2001; Faust and Henderson 2004). Following Geraats (2002), transparency can be thought of as the removal of information asymmetries. Geraats catalogues five areas of monetary policymaking in which transparency could affect outcomes: (i) the central bank's objectives and its institutional relationship with the rest of government; (ii) the publication of data and forecasts; (iii) internal decision-making; (iv) the communication and explanation of policy changes; and (v) details of the implementation of policy.
These in turn give rise to five elements of transparency (political, economic, procedural, policy and operational). The introduction of IT is widely held to increase political transparency, by forcing the central bank to specify both the variable that it is targeting (some measure of consumer price inflation) and a precise numerical target for the targeted variable, as well as – in many cases – delineating more clearly the division of responsibilities between the bank and the political authorities (King 1997; Eijffinger and Geraats 2006).
- Type
- Chapter
- Information
- Twenty Years of Inflation TargetingLessons Learned and Future Prospects, pp. 337 - 367Publisher: Cambridge University PressPrint publication year: 2010
- 2
- Cited by