Keeping sight of the real inflation target

Jill Leyland

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Inflation targeting is used by many central banks and other monetary authorities around the world as a key element of economic policy. The usual target is a consumer price index (CPI). There are debates as to whether the CPI is the best target or if some other inflation indicator, such as the GDP deflator, should be used. Since the advent of the global financial crisis in 2007, debates have also focused on whether or not inflation targeting itself

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