Opening Remarks at the International Monetary Fund Institute’s
- Fischer, Stanley
- Low Inflation Environment,” Federal Reserve Bank…
he idea of creating a framework for explicit inflation targeting in the U.S. has recently become a topic of considerable discussion. The key question is: Could inflation targeting improve on the U.S. economy’s performance? President Santomero thinks inflation targeting makes sense for the U.S., in principle. But he cautions that several important issues must be worked out before an explicit targeting regime is established. In this quarter’s message, he discusses these issues — in particular, calibrating the target and reconciling inflation targeting with the Fed’s mandate to foster not just price stability but also full employment.