Inflation targeting
Central banks should test robustness of their main macro models – paper
Bank of Canada paper says users of large-scale macroeconomic models should develop tools to assess whether non-linearities could be distorting results
Inflation targeting three decades on
Former RBNZ governor Don Brash reflects on whether New Zealand’s experiment with inflation targeting has worked
Riksbank proposes changes to inflation target
Central bank plans to use a variable that avoids short-term distortions, and to reinstate a band around the target
Digital currency could remove need for positive inflation target, economists argue
Proposed digital framework eliminates the need for “inflation buffer” and promotes transparency of the balance sheet
The BoJ’s risky yield curve control experiment
The Bank of Japan’s experiment with yield curve control could work if appropriate targets and communication strategies were applied. But its current policy objectives are muddled
John Williams backs move to price-level targeting
San Francisco Fed chief says inflation targeting is losing its effectiveness in the face of a very low natural rate
BoJ should provide ‘more realistic’ projections – former policy board member
Claims constant overestimation of inflation expectations undermines credibility
BoJ cuts inflation forecast at a time of falling JGB purchases
Bank of Japan reduces forecast to 1.4% as bond purchases appear to be declining
Turkish central bank raises inflation forecast
Report suggests inflation will fall to 8.5% by the end of the year; monetary policy committee increased lending rate earlier this week citing ‘deterioration’ in outlook
Adopting a dual mandate will not solve South African unemployment – Kganyago
Unemployment problems are caused by structural issues, Sarb governor says; scope for reducing unemployment through monetary policy is “smaller” than people imagine
Book notes: Bankers, Bureaucrats and Central Bank Politics, by Christopher Adolph
An interesting, if slightly dated, analysis of those who made monetary policy decisions in advanced economies between 1950–2001, attempting to understand whether personal background influences decision-making
Bank of Jamaica outlines plans to become ‘modern’ central bank
Initiatives to implement inflation-targeting framework and liberalise forex rate already under way; IMF says strengthening autonomy will help
Ukraine’s Gontareva to step down
NBU governor says her mission is complete, resigning three years into a seven-year term amid intense pressure
Positive shock could still trip up advanced economies – Blanchard
Former IMF chief economist warns high debt levels could interact with positive shocks to cause problems; backs Rogoff’s plan for a cashless society
Kashkari explains his sole FOMC dissent
Minneapolis chief reminds his colleagues the Fed treats 2% inflation as a target, not a ceiling; urges FOMC to publish plan for shrinking balance sheet
Lifetime achievement award: Donald Kohn
Donald Kohn’s objectivity, intelligence, humour, tireless energy and iron determination to get the job done epitomise the role of a dedicated public servant. He serves as an inspiration to others
Kazakhstan’s long path to inflation targeting
After a slow start, the National Bank of Kazakhstan’s implementation of inflation forecast targeting is beginning to mature. By Warren Coats
Kazakhstan’s Akishev sets sights on lower inflation
Governor hails success with inflation targeting and says central bank now plans to push inflation even lower; NBK also working on new banking supervision framework
Norges Bank defends policy framework amid government review
The government is assessing the central bank’s governance and monetary policy; Norges Bank says it needs a “long and flexible horizon” to be able to properly conduct its policy framework
Harker optimistic in first speech as FOMC voting member
Inflation target set to be met this year, says Philadelphia Fed governor, noting labour force participation issues need to be addressed with legislative action
Sri Lankan government to restructure central bank
Central bank is to be restructured with amendments to the Banking Act, but disagreements remain between the finance minister and governor; inflation-targeting framework appears to be on track
Adopting inflation target can create higher inflation – paper
Bank of Korea working paper finds positive relationship between inflation target and inflation, implying some central banks may be tempted to move the goalposts
Inflation to reach 2% target in next six months, BoE says
MPC votes unanimously to leave rates unchanged at 0.25%; exchange rate appreciation suggests smaller overshoot of inflation target than previously forecast
Riksbank’s Jansson rejects calls to scrap inflation target
Critics likely underestimate the benefits of the current monetary policy framework when calling for it to change, deputy governor says