Economics
ECB Study on Inflation Targeting Finds Ranges Beat Hard Goals
- Paper looks at strategies adopted across 20 economies
- Results could have implications for ECB’s policy review
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Central banks can better control inflation expectations if they use a range for price growth rather than a precise goal, according to a European Central Bank study that could have implications for the institution’s strategic review.
The working paper by Michael Ehrmann, head of the monetary policy research division and a former Bank of Canada official, looked at inflation-targeting strategies in 20 advanced and emerging-market economies.