Book contents
- Frontmatter
- Contents
- List of figures
- List of tables
- List of contributors
- 1 Introduction
- 2 Welcome remarks: a Norwegian perspective
- 3 Reflections on inflation targeting
- 4 Inflation targeting at twenty: achievements and challenges
- 5 Inflation targeting twenty years on: where, when, why, with what effects and what lies ahead?
- 6 How did we get to inflation targeting and where do we need to go to now? A perspective from the US experience
- 7 Inflation control around the world: why are some countries more successful than others?
- 8 Targeting inflation in Asia and the Pacific: lessons from the recent past
- 9 Inflation targeting and asset prices
- 10 The optimal monetary policy instrument, inflation versus asset price targeting, and financial stability
- 11 Expectations, deflation traps and macroeconomic policy
- 12 Heterogeneous expectations, learning and European inflation dynamics
- 13 Inflation targeting and private sector forecasts
- 14 Inflation targeting, transparency and inflation forecasts: evidence from individual forecasters
- 15 Gauging the effectiveness of quantitative forward guidance: evidence from three inflation targeters
- 16 Macro-modelling with many models
- 17 Have crisis monetary policy initiatives jeopardised central bank independence?
- 18 Inflation targeting: learning the lessons from the financial crisis
- 19 The financial crisis as an opportunity to strengthen inflation-targeting frameworks
- 20 ‘Leaning against the wind’ is fine, but will often not be enough
- 21 Inflation targeting, capital requirements and ‘leaning against the wind’: some comments
- Index
15 - Gauging the effectiveness of quantitative forward guidance: evidence from three inflation targeters
Published online by Cambridge University Press: 05 October 2010
- Frontmatter
- Contents
- List of figures
- List of tables
- List of contributors
- 1 Introduction
- 2 Welcome remarks: a Norwegian perspective
- 3 Reflections on inflation targeting
- 4 Inflation targeting at twenty: achievements and challenges
- 5 Inflation targeting twenty years on: where, when, why, with what effects and what lies ahead?
- 6 How did we get to inflation targeting and where do we need to go to now? A perspective from the US experience
- 7 Inflation control around the world: why are some countries more successful than others?
- 8 Targeting inflation in Asia and the Pacific: lessons from the recent past
- 9 Inflation targeting and asset prices
- 10 The optimal monetary policy instrument, inflation versus asset price targeting, and financial stability
- 11 Expectations, deflation traps and macroeconomic policy
- 12 Heterogeneous expectations, learning and European inflation dynamics
- 13 Inflation targeting and private sector forecasts
- 14 Inflation targeting, transparency and inflation forecasts: evidence from individual forecasters
- 15 Gauging the effectiveness of quantitative forward guidance: evidence from three inflation targeters
- 16 Macro-modelling with many models
- 17 Have crisis monetary policy initiatives jeopardised central bank independence?
- 18 Inflation targeting: learning the lessons from the financial crisis
- 19 The financial crisis as an opportunity to strengthen inflation-targeting frameworks
- 20 ‘Leaning against the wind’ is fine, but will often not be enough
- 21 Inflation targeting, capital requirements and ‘leaning against the wind’: some comments
- Index
Summary
Introduction
Over the past decade central banks around the world have gradually moved towards establishing more transparency in their conduct of monetary policy (see Dincer and Eichengreen 2007 and Geraats 2009). In particular, increasing emphasis is being given to effective communication of the prospective future course of monetary policy. The standard practice among central banks is to provide forward guidance via a projection or forecast of their goal variables (mainly inflation and real GDP growth) and other standard channels, such as press conferences, statements and speeches. A few inflation-targeting central banks have gone one step further and give quantitative forward guidance by publishing their own projection or forecast of the future path of policy rates. This practice is currently pursued by four inflation targeters: the Reserve Bank of New Zealand (since 1997), Norges Bank (since 2005), the Swedish Riksbank (since 2007) and the Czech National Bank (since 2008). The vast majority of central banks, in particular the leading non-inflation-targeting central banks, the Federal Reserve, the ECB and the Bank of Japan, but also the Bank of England as one of the leading inflation-targeting central banks, have so far decided against publishing their own interest rate path.
From a theoretical point of view, the main argument brought up in favour of the central bank publishing its own interest rate path is that it would enhance the central bank's ability to manage expectations and thereby facilitate the transmission of monetary policy (Woodford 2005; Svensson 2006, 2009; Rudebusch and Williams 2008).
- Type
- Chapter
- Information
- Twenty Years of Inflation TargetingLessons Learned and Future Prospects, pp. 368 - 397Publisher: Cambridge University PressPrint publication year: 2010
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