Rethinking Inflation Targeting
Over the last two decades, inflation targeting has become the predominant monetary-policy framework. But, as we have seen in the period since the 2008 financial crisis, this approach cannot support long-term monetary stability in a complex and constantly evolving economy.
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ZURICH – Over the last two decades, inflation targeting has become the predominant monetary-policy framework. It has been essentially (though not explicitly) adopted by major central banks, including the US Federal Reserve, the European Central Bank, and the Swiss National Bank. But the 2008 global economic crisis, from which the world has yet to recover fully, has cast serious doubt on this approach.