Scandinavian Working Papers in Economics

Seminar Papers,
Stockholm University, Institute for International Economic Studies

No 625: Inflation Targeting: Some Extensions

Lars E.O. Svensson ()
Additional contact information
Lars E.O. Svensson: Institute for International Economic Studies, Stockholm University, Postal: Stockholm University, S-106 69 Stockholm, Sweden

Abstract: Previous analysis of the implementation of inflation targeting is extended to monetary policy responses to different shocks, consequences of model uncertainty, effects of interest rate smoothing and stabilization, a comparison with nominal GDP targeting, and implications of forward-looking behavior. Model uncertainty, output stabilization, and interest rate stabilization or smoothing all call for a more gradual adjustment of the conditional inflation forecast toward the inflation target. The conditional inflation forecast is the natural intermediate target during inflation targeting.

Keywords: inflation targeting; monetary policy; shocks; model uncertainty; interest rate smoothing; conditional inflation forecast

JEL-codes: E42; E52; E58

44 pages, October 31, 1997

Full text files

FULLTEXT01 PDF-file 

Download statistics

Questions (including download problems) about the papers in this series should be directed to Hanna Christiansson ()
Report other problems with accessing this service to Sune Karlsson ().

This page generated on 2024-02-05 17:11:56.