Consider a policy of output and inflation targeting: the central bank announces numerical targets for both inflation

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Consider a policy of “output and inflation targeting": the central bank announces numerical targets for both inflation and real GDP. What are the pros and cons of such a policy? No central bank has seriously considered this approach; why not?

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Money Banking and Financial Markets

ISBN: 978-1429244091

2nd edition

Authors: Laurence M. Ball

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Question Posted: Dec 05, 2015 03:47 AM

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Consider a policy of output and inflation targeting: the central bank announces numerical targets for both inflation

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Numerical output targeting requires that the central bank can correctly measure potential output Sin...View the full answer

Money Banking and Financial Markets

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