IMF Working Papers

The United Kingdom's Experience with Inflation Targeting

June 1, 1998

Preview Citation

Format: Chicago

The United Kingdom's Experience with Inflation Targeting, (USA: International Monetary Fund, 1998) accessed December 21, 2024
Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

This paper reviews the first five years’ experience with inflation targeting in the United Kingdom. It concludes that inflation performance was not significantly different under inflation targeting than predicted by a VAR model estimated in the period prior to participation in the exchange rate mechanism (ERM). Both short- and long-term interest rates were lower than predicted, however, which is consistent with the interpretation that some gains in credibility were achieved under the inflation targeting regime.

Subject: Econometric analysis, Financial services, Inflation, Inflation targeting, Long term interest rates, Monetary policy, Prices, Short term interest rates, Vector autoregression

Keywords: Australia and New Zealand, Boosts credibility, ERM, Global, Inflation, Inflation performance, Inflation targeting, Inflation targeting entail, Inflation targeting experience, Inflation targeting period, Inflation-targeting framework, Interest rate, Long term interest rates, Monetary framework, Monetary policy, Short term interest rates, Surprise inflation, United Kingdom, Vector autoregression, WP

Publication Details

  • Pages:

    29

  • Volume:

    ---

  • DOI:

    ---

  • Issue:

    ---

  • Series:

    Working Paper No. 1998/087

  • Stock No:

    WPIEA0871998

  • ISBN:

    9781451850994

  • ISSN:

    1018-5941