The bitter divide on inflation targeting

Boxing gloves

Many central bankers have over the past month been incensed by a recent suggestion that inflation targets, which hover around the 2% mark in the majority of countries that use the framework, could do with being raised.

In a paper published in early February, Olivier Blanchard, the IMF's chief economist, called for inflation targets to be raised to about 4%, arguing that with the focus on controlling price growth, central banks were neglecting the more worrying prospect of spiralling deflation. T

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