An Overhaul of Doctrine

The Underpinning of UK Inflation Targeting

Bibliographic Data

ID9716697
AuthorsEdward Nelson (Federal Reserve Bank of St. Louis, corresponding author)
Year2009
Volume119
Issue538
PagesF333-F368
Publication date2009-06-01
Peer ReviewedYes
Open AccessYes
TypeARTICLE
VenueThe Economic Journal (JOURNAL)
Journal identifiersISSN: 0013-0133 • E-ISSN: 1468-0297
PublisherOxford University Press (OUP) (PUBLISHER)
DOI10.1111/j.1468-0297.2009.02278.x
OpenAlexW3126089916
LanguageEN
Citations received4
References cited22

The inflation targeting regime prevailing in the UK is not the result of a change in policy maker objectives. Analysis of UK policymakers' statements demonstrates that objectives have been essentially unchanged over five decades. Instead, the crucial underpinning of UK inflation targeting is an overhaul of doctrine. This overhaul involves changes in policymakers' views regarding key IS and Phillips curve parameters. They particularly have involved whether levels terms (of the real interest rate and the output gap) appear in the curves. Contrary to conventional wisdom, changing views on the expected-inflation term in the Phillips curve do not play a role. Copyright © The Author(s). Journal compilation © Royal Economic Society 2009

Doctrine · Economics · Inflation (cosmology · Keynesian economics · Macroeconomics · Monetary policy · Phillips curve · Political science · Underpinning · Economic Theory and Policy · Economic, financial, and policy analysis · Engineering · Law · Monetary Policy and Economic Impact

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