Monetary Policy and Inflation Targeting: The Effectiveness of Central Bank Interventions

Dimple Jain

doi:10.36676/jrps.v15.i2.02

Authors

Dimple Jain Guest Faculty in Economics, University of Delhi

DOI:

https://doi.org/10.36676/jrps.v15.i2.02

Keywords:

Monetary policy, Inflation targeting, Central banks, Interventions, Price stability

Abstract

Central banks throughout the world have adopted inflation targeting as their main policy goal in the last several decades, drastically altering monetary policy—a pillar of economic management. the complex interplay between monetary policy, central bank interventions and measures for controlling inflation, and the success or failure of inflation targeting as a whole. This research aims to shed light on the extent to which central bank operations impact inflation results and the larger economic environment by conducting a thorough review of empirical evidence, case studies, and theoretical frameworks.

References

• Bernanke, B. S., Laubach, T., Mishkin, F. S., & Posen, A. S. (1999). Inflation targeting: Lessons from the international experience. Princeton University Press.

• Svensson, L. E. (2010). Inflation targeting. Handbook of Monetary Economics, 3, 1237-1302. DOI: https://doi.org/10.1016/B978-0-444-53454-5.00010-4

• Mishkin, F. S., & Schmidt-Hebbel, K. (2001). One decade of inflation targeting in the world: What do we know and what do we need to know? NBER Working Paper No. 8397. DOI: https://doi.org/10.3386/w8397

• Woodford, M. (2003). Interest and prices: Foundations of a theory of monetary policy. Princeton University Press. DOI: https://doi.org/10.1515/9781400830169

• Mishkin, F. S. (2011). Monetary policy strategy: Lessons from the crisis. The National Bureau of Economic Research, NBER Working Paper No. 16755. DOI: https://doi.org/10.3386/w16755

• Clarida, R., Galí, J., & Gertler, M. (1999). The science of monetary policy: A new Keynesian perspective. Journal of Economic Literature, 37(4), 1661-1707. DOI: https://doi.org/10.1257/jel.37.4.1661

• Goodhart, C. (2005). The interest rate conditioning heuristic: Information versus risk and return. In The Interest Rate, the Markets, and the IS Curve (pp. 11-35). Palgrave Macmillan.

• Taylor, J. B. (1993). Discretion versus policy rules in practice. Carnegie-Rochester Conference Series on Public Policy, 39, 195-214. DOI: https://doi.org/10.1016/0167-2231(93)90009-L

• Orphanides, A., & Wieland, V. (2008). Economic projections and rules of thumb for monetary policy. Journal of Monetary Economics, 55(2), S1-S17. DOI: https://doi.org/10.1016/j.jmoneco.2008.07.006

• Rudebusch, G. D., & Svensson, L. E. (1999). Policy rules for inflation targeting. In Taylor, J.B. (Ed.), Monetary policy rules (pp. 203-246). University of Chicago Press. DOI: https://doi.org/10.3386/w6512