Tokyo disputes inflation targets

The year 2006 will be important for the Bank of Japan and the Federal Reserve as each will increasingly debate whether some type of inflation targetting will improve policy outcomes compared with what Alan Blinder (1998) calls "enlightened discretion". Some argue targetting and enlightened discretion are the same when the final policy target is price stability because policy is conducted "as if" a targetting framework were in place. However this is incorrect. Targetting is a significant depar