Inflation-targeting and Forex intervention: Are two targets better than one?
Marcos Chamon, Atish R Ghosh, Jonathan D Ostry, 27 May 2012Before the global crisis, central banks could reply ‘inflation targeting’ to virtually any question about their policymaking and the ‘Great Moderation’ seemed to back them up. The crisis has put a stop to this smugness. Central banks are now engaged in emergency evasive manoeuvres and are scrambling for new intellectual anchors. This column argues that emerging market central banks should view both price and exchange-rate stability as targets.Full Article: Inflation-targeting and Forex intervention: Are two targets better than one?