In the US, many, like Blanchard and Krugman, have for long advocated a higher inflation target as a means of getting the economy ‘moving’.
James Alexander via Historinhas | I was pleased to report some traction in the Market Monetarist campaign to see inflation targets substituted by, or added to, an NGDP growth target. One common pushback I’ve received recently is if the central bank can’t hit a 2% target how can it hit a tougher target? It’s a reasonable question.
James Alexander via Historinhas | You have to feel for ECB President Draghi sometimes. He’s trying to steer a huge and dysfunctional ship. His heart is in the right place, but he has far too much faith in the interest rate and credit channel “instruments” for the management of monetary policy. They have prevented further recessions and do seem to have the Euro area on the right track, but it is painfully slow and risky .
It is a simple story of failure, but one that fits the facts. It´s also based on a simple premise: An inflation obsession that took hold in 1974.
SAO PAULO | By Marcus Nunes | For the last four years many have touted increasing the inflation target to 4% as the best way to “cure” our ills. If I well recall, it started with the IMF, at least by its Chief-Economist Olivier Blanchard, who in an IMF publication wrote “Rethinking Macroeconomic Policy.”