. Central banks that engage in inflation targeting usuallyannounce the inflation target and time period for whichthat target will be relevant. In addition, central bankofficials are held accountable for their actions (e.g.,they could be fired if the target is not reached), andtheir success or lack thereof is also public information.Explain why transparency is such a fundamental ingredient of inflation targeting.
. Central banks that engage in inflation targeting usuallyannounce the inflation target and time period for whichthat target will be relevant. In addition, central bankofficials are held accountable for their actions (e.g.,they could be fired if the target is not reached), andtheir success or lack thereof is also public information.Explain why transparency is such a fundamental ingredient of inflation targeting.
Chapter27: Issues In Macroeconomic Theory And Policy
Section: Chapter Questions
Problem 6P
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. Central banks that engage in inflation targeting usually
announce the inflation target and time period for which
that target will be relevant. In addition, central bank
officials are held accountable for their actions (e.g.,
they could be fired if the target is not reached), and
their success or lack thereof is also public information.
Explain why transparency is such a fundamental ingredient of inflation targeting.
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