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Inflation Targeting in the United Kingdom

Diplomarbeit 2008 82 Seiten

BWL - Investition und Finanzierung

Zusammenfassung

Inhaltsangabe:Introduction:
‘(A)n internal standard, so regulated as to maintain stability in an index number of prices, is a difficult scientific innovation, never yet put into practice’.
Especially since the operational introduction as central bank monetary policy framework in the early 1990s in New Zealand, the United Kingdom (UK), Canada and Sweden, inflation targeting has gained both empirical and theoretical relevance as a monetary policy strategy.
In this paper I relate to inflation targeting theory and its framework in the UK. For that purpose I first regard the development of inflation targeting in respect to other monetary policy strategies in sections (2.2) and (2.3). I will answer the question what the actual target variable is and why one would want to have inflation being low and stable. Then there is some complexity because the development of inflation targeting has to be viewed in relation to paradigmatic debates between Monetarist and New-Keynesian insights. In the sections (2.4) and (2.4) I present the two fundamental views of how an inflation targeting framework should be modelled. By stating some equations from basic theoretical literature, I try to give a overview about the dfferent characteristics of that monetary policy strategy and how there is still controversy about the way of modelling. Chapter (3) is concerned with the operational framework in the UK, including statements to historical developments at the Bank of England in section (3.1). In particular, gaining of operational independence in setting interest rates—section (3.1.5)—was an important step for the Bank. The present monetary policy framework will be reviewed in section (3.2), in detail relating to the Bank’s publication policy—section (3.2.2)—and the inflation forecasting process—section (3.2.3).
The Bank of England’s model of the transmission mechanism is reviewed in section (3.3). This includes the interest rate setting process, the role of money and the relationship between inflation and inflation expectations. Finally, I discuss some economic effects that changed the British economy since the introduction of inflation targeting—section (3.4). Inhaltsverzeichnis:Table of Contents:
1.Abstract2
2.Monetary Policy2
2.1Introduction2
2.2Monetary Policy2
2.2.1Monetary Policy Strategies in Theory2
2.2.2Monetary Stability as an Aim of Monetary Policy4
2.2.3Empirical Monetary Strategies 5
2.2.4Monetary Transmission Mechanisms6
2.3Inflation […]

Details

Seiten
82
Erscheinungsform
Originalausgabe
Jahr
2008
ISBN (eBook)
9783836625968
Dateigröße
1.1 MB
Sprache
Englisch
Katalognummer
v226552
Institution / Hochschule
Technische Universität Chemnitz – Fakultät für Wirtschaftswissenschaften
Note
1,3
Schlagworte
bank england asset price bubbles monetary stability inflationssteuerung großbritannien

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Titel: Inflation Targeting in the United Kingdom