Goodhart's luck
Article Abstract:
United Kingdom inflation has stayed low, and this has been attributed to the interest rate policy of the Bank of England. Charles Goodhart, a member of the bank's Monetary Policy Committee (MPC), which decides on interest rates, argues that luck and past policies have had much to do with low inflation. Interest rates take some two years to affect inflation, Goodhart argues, so low inflation is linked to polices before the MPC began operating. Fiscal policy and exchange rates also affect inflation, as do events in overseas economies. Goodhart sees education of the public as important, since the MPC may be wrongly blamed if inflation rises.
Publication Name: The Economist (UK)
Subject: Business, international
ISSN: 0013-0613
Year: 1999
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Dropping anchor
Article Abstract:
Inflation targets have become fashionable and were used by 54 economies in 1998, while only 8 economies used them in 1990. Inflation targets can be used to control deflation as well as inflation. Stock prices and the money supply should not be ignored, but central banks may not be paying enough attention to the money supply. It may not be practical to have rigid monetary targets, but the money supply should not be ignored. The US has seen a rapid growth in its money supply and there is a need for central banks to assess why such a growth should occur.
Publication Name: The Economist (UK)
Subject: Business, international
ISSN: 0013-0613
Year: 1999
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How low can you go?
Article Abstract:
Issues relating to price stability, inflation goals, and the role of central banks are examined in detail.
Publication Name: The Economist (UK)
Subject: Business, international
ISSN: 0013-0613
Year: 2000
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