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Definition of Inflation Targeting
Inflation targeting is a monetary policy framework where a central bank is mandated to adjust interest rates to influence aggregate demand, with the primary objective of keeping the economy's inflation rate near a specific target level, which is typically established by the government.
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Economics
Economy
Introduction to Macroeconomics Course
Ch.5 Macroeconomic policy: Inflation and unemployment - The Economy 2.0 Macroeconomics @ CORE Econ
The Economy 2.0 Macroeconomics @ CORE Econ
CORE Econ
Social Science
Empirical Science
Science
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Historical Government Control over Monetary Policy
Influence of 1970s High Inflation on Macroeconomic Policy Rethinking
Figure E6.1a: Determining the Policy Rate in a Scarce Reserves System
An economy is experiencing a period of slow growth and rising unemployment. To stimulate economic activity, what action is a central bank most likely to undertake as part of its standard policy response?
Responding to an Overheating Economy
A central bank decides to raise its main interest rate to combat rapidly rising prices in the economy. Arrange the following outcomes in the logical order they would occur following this policy action.
Evaluating the Trade-offs of Monetary Policy
Shared Role of Fiscal and Monetary Policy in Managing the Economy
Policy Interest Rate
Inflation Targeting
Definition of Central Bank Independence
Definition of Inflation Targeting
The 1990s Shift Towards Central Bank Independence
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The 1990s Shift Towards Central Bank Independence
A country's central bank is given the authority to adjust interest rates to manage the economy. Its official mandate is to pursue two co-equal goals: maintaining low unemployment and achieving stable prices. The government, however, has not defined a specific numerical value for what constitutes 'stable prices'. Based on this description, which essential component of a pure inflation targeting framework is missing?
Monetary Policy Framework Analysis
Under a strict inflation targeting framework, if a country experiences a sudden rise in unemployment while inflation remains at the target level, the central bank is mandated to prioritize lowering unemployment over maintaining the inflation target.
Central Bank Response to Inflationary Pressure