NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Policy Rules for Inflation Targeting

Glenn D. Rudebusch, Lars E. O. Svensson

NBER Working Paper No. 6512
Issued in April 1998
NBER Program(s):   IFM   ME

Policy rules that are consistent with inflation targeting are examined in a small macroeconomic model of the US economy. We compare the properties and outcomes of explicit instrument rules' as well as targeting rules.' The latter, which imply implicit instrument rules, may be closer to actual operating procedures of inflation-targeting central banks. We find that inflation forecasts are central for good policy rules under inflation targeting. Some simple instrument and targeting rules do remarkably well relative to the optimal rule; others, including some that are often used as representing inflation targeting, do less well.

download in pdf format
   (2132 K)

email paper

This paper is available as PDF (2132 K) or via email.

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w6512

Published:

  • Glenn D. Rudebusch & Lars E. O. Svensson, 1998. "Policy rules for inflation targeting," Proceedings, Federal Reserve Bank of San Francisco, issue Mar. ,
  • Monetary Policy Rules, Taylor, John B., ed., Chicago: University of Chicago Press, 1999. ,
  • Policy Rules for Inflation Targeting, Glenn Rudebusch, Lars E.O. Svensson. in Monetary Policy Rules, Taylor. 1999

Users who downloaded this paper also downloaded these:
Svensson w16654 Inflation Targeting
Svensson w6790 Inflation Targeting as a Monetary Policy Rule
Mishkin and Schmidt-Hebbel w8397 One Decade of Inflation Targeting in the World: What Do We Know and What Do We Need to Know?
Svensson w6545 Open-Economy Inflation Targeting
Rudebusch and Svensson Policy Rules for Inflation Targeting
 
Publications
Activities
Meetings
NBER Videos
Data
People
About

Support
National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us