Inflation Targeting [Hardcover]

Ben S. Bernanke (Author), Frederic S. Mishkin (Author), Adam S. Posen (Author)

Book Description

Publication Date: November 23, 1998

How should governments and central banks use monetary policy to create a healthy economy? Traditionally, policymakers have used such strategies as controlling the growth of the money supply or pegging the exchange rate to a stable currency. In recent years a promising new approach has emerged: publicly announcing and pursuing specific targets for the rate of inflation. This book is a study of inflation targeting. Combining theoretical analysis with empirical studies of countries where inflation targeting has been adopted, the authors show that the strategy has clear advantages over traditional policies. They argue that the US Federal Reserve and the European Central Bank should adopt this strategy, and they make specific proposals for doing so. The authors warn, however, that the success of inflation targeting depends on operational details, such as how the targets are defined and when they are announced. They also show that inflation targeting is not a panacea that can make inflation perfectly predictable or reduce it without economic costs.

Editorial Reviews

Review

This readable and well-structured examination of a relatively new approach to guiding monetary policy is a useful addition to contemporary policy analysis. -- Review

This volume provides a comprehensive, valuable examination of diverse international experience with inflation targeting regimes. -- Lucjan T. Orlowski, Journal of Comparative Economics

From the Inside Flap

"The most accessible study of this important new monetary regime--accessible to a wide range of readers well beyond the ranks of professional economists. [Inflation Targeting] should, and is intended to, appeal to historians, political scientists, international-relations students, politicians, central bankers, journalists, as well as to economists and to undergraduates at any level of sophistication."--C.A.E. Goodhart, London School of Economics and external member of the United Kingdom's Monetary Policy Committee

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Product Details

• Hardcover: 304 pages
• Publisher: Princeton University Press (November 23, 1998)
• Language: English
• ISBN-10: 0691059551
• ISBN-13: 978-0691059556
• Product Dimensions: 9.2 x 6.3 x 1.3 inches
• Shipping Weight: 1.4 pounds
• Average Customer Review: 3.8 out of 5 stars  See all reviews (4 customer reviews)
• Amazon Best Sellers Rank: #942,885 in Books (See Top 100 in Books)

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Most Helpful Customer Reviews

11 of 11 people found the following review helpful:

3.0 out of 5 stars Heavy on the case studies and mildly repetitive., September 21, 1999

By A Customer

This review is from: Inflation Targeting (Hardcover)

An easy to read book for people of all levels. It takes the reader through case studies on the various countries which have introduced inflation targeting. This is interesting from a historical perspective, but since inflation targeting really is a very simple concept (announce an inflation target, describe why you aim to hit this target, make it clear how you shall go about achieving this target and at all times be transparent in your pursuit of that target) the book tends to be repetitive. This book simply goes over too many similar regimes and thus cannot help but cover the same points over again. The last chapter is a study of the U.S. (a rare example of a country with very steady inflation which has not introduced an explicit inflation target) with some recommendations on how (and why) it should implement an inflation target. This book is recommended if you want very indepth case studies on the introduction of inflation targeting in countries as different as Sweden, New Zealand, The U.K. and Australia, but if you only need a quick overview of what inflation targeting is then buy a good general Economics textbook and read the section on it.

9 of 10 people found the following review helpful:

3.0 out of 5 stars Yawn, January 13, 2000

By A Customer

This review is from: Inflation Targeting (Hardcover)

I have never been a fan of condensed books for the obvious reason that they leave out content and motivation. This book, however, could be shrunk by 3/4 without any real loss. Yes, there is much in-depth case study information here, but the paper could have been much better used by substituting much of it for some harder, theoretical motivation and analytical discussions. The authors are capable of this. Also, despite the painstaking redundent detail and a few regressions, for me the authors fail to place inflation targeting and inflation targeting countries into the greater context of inflationary policies and countries facing inflation. It surprises me that there is no mention of some of the, especially developing countries, where inflation has been a serious problem and where most battles of the future are likely to be fought.

3 of 3 people found the following review helpful:

4.0 out of 5 stars fair, March 30, 2006

By 

gominers - See all my reviews

This review is from: Inflation Targeting: Lessons from the International Experience (Paperback)

This book is designed essentially all audiences, i.e., it could an easy read for undergraduate economic students. The book, while somewhat repetitive, is a good 'read' especially as one of the authors is now the Chairman of the Federal Reserve who advocates inflation targeting.

The prior reviewer was unhappy that developing countries' central bank experiences were not included in the book. I am afraid that would have made for an unweildy book given that the focus is on credible inflation targeting regimes with a 'track record' - not countries who are in need of such a regime. Such a discussion can be found in other books. It is not a coincidence that the authors focused on developed countries - that is their interest and specialty.

The focus is not on policy prescriptions per se but what has and has not been effective. This is not an IMF prescription manual for a developing country. The countries studied underwent shocks but their relative stability leads to a more certain analysis.