TY  - JOUR
AU  - Cecchetti, Stephen G
AU  - Kim, Junhan
TI  - Inflation Targeting, Price-Path Targeting and Output Variability
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 9672
PY  - 2003
Y2  - May 2003
DO  - 10.3386/w9672
UR  - http://www.nber.org/papers/w9672
L1  - http://www.nber.org/papers/w9672.pdf
N1  - Author contact info:
Stephen G. Cecchetti
Brandeis University
International Business School
415 South Street
Waltham MA 02453
Tel: 781/736-4856
Fax: 781/736-2269
E-Mail: cecchetti@brandeis.edu
M1  - published as Stephen G. Cecchetti,  Kim. "Inflation Targeting, Price-Path Targeting, and Output Variability," in Ben S. Bernanke and Michael Woodford, editors, "The Inflation-Targeting Debate" University of Chicago Press (2005)

AB  - The dramatic improvement in macroeconomic outcomes during the 1990s - stable, low inflation and high, stable growth - can be at least partly ascribed to improved monetary policy. Central banks became more independent and many of them adopted inflation targeting. This paper examines the potential for further improvements by refining the concept of inflation targeting. We construct a general model that encompasses a broad array of possible target regimes, and apply it to the data. Our results suggest that the vast majority of countries could benefit from moving to pricepath targeting, where the central bank makes up for periods of above (below) target inflation with later periods of below (above) target inflation.
ER  -