Bernanke argues for ‘time-limited price targeting’ policy framework
Committing to make up inflation shortfalls in past year would avoid overshooting, paper finds
A policy of “temporary price level targeting” could bring a faster economic recovery for an economy where interest rates were stuck at the zero lower bound, former Federal Reserve chair Ben Bernanke finds in a recent paper.
The policy could also avoid “overshooting” inflation targets, argue Bernanke and his co-authors Michael Kiley and John Roberts, responding to a recent critique by Federal Reserve board member Lael Brainard.
The paper evaluates the performance of 10 monetary policy
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