The Theory of Average Inflation Targeting

I will then summarize the theoretical underpinnings of what is commonly referred to as Average Inflation Targeting, or AIT for short.

John C Williams: The theory of average inflation targeting

To highlight the connections between r-star, the lower bound on interest rates, and below-target inflation, Thomas. Mertens and I analyze a ...

Average Inflation Targeting in the Financial Crisis Recovery

This strategy allows inflation to rise and fall such that it averages 2% over time. Analysis shows that a version of average inflation targeting ...

What is “average inflation targeting”? - Brookings Institution

The groundwork to declare an inflation target and set it at 2 percent was laid in the 1980s when central banks around the world were eager to ...

Average inflation targeting and the interest rate lower bound

The Federal Reserve adopted an average inflation targeting (AIT) strategy that aims to achieve inflation above target for some time following periods when ...

Average Inflation Targeting: Time Inconsistency and Ambiguous ...

By convincing the private sector of its intention to implement AIT, the central bank can improve the trade- off between inflation and real activity, which is ...

Inflation Targeting: Holding the Line

Because interest rates and inflation rates tend to move in opposite directions, the likely actions a central bank will take to raise or lower interest rates ...

What Is Inflation Targeting, and How Does It Work? - Investopedia

Inflation targeting is a central banking policy that revolves around meeting preset, publicly displayed targets for the annual rate of inflation.

Average Inflation Targeting in a Low-Rate Environment

One significant change in the US economy in the last 20 years is the trend decline in real interest rates that pushes the policy rate near ...

Average inflation targeting and the interest rate lower bound

This paper contributes to this discussion by analyzing the effects of average inflation targeting. (AIT) on macroeconomic stabilization and society's welfare in ...

Average Inflation Targeting and Household Expectations

The Federal Reserve was formally adopting a new strategy that he termed a “flexible form of average inflation targeting” (AIT) to try to ensure that the Fed's ...

Fed's new inflation targeting policy seeks to maintain well-anchored ...

The Fed lets “bygones be bygones,” since it does not attempt to make up for past inflation deviations from target. By comparison, average ...

Average Inflation Targeting - jstor

The analysis of this paper demonstrates that when the Phillips curve has forward-looking components, a goal for average inflation-i.e., targeting.

Inflation targeting - Wikipedia

An inflation-targeting central bank will raise or lower interest rates based on above-target or below-target inflation, respectively. The conventional wisdom is ...

From inflation targeting to average inflation targeting - FRED Blog

The Fed's new long-run monetary framework ... Since 1996, it has been understood among Fed policymakers that the (undeclared) target for inflation ...

The Origins of the 2 Percent Inflation Target | Richmond Fed

His argument centered on the ability of policymakers to boost economic activity through interest rate cuts during periods of low inflation. Cutting rates ...

Average inflation targeting: Time inconsistency and ambiguous ...

We study the implications of average inflation targeting (AIT). AIT improves the inflation-output trade-off when the private sector believes the central bank's ...

Inflation Targeting: Holding the Line - Back to Basics

Because interest rates and inflation rates tend to move in opposite ... Inflation targeting is straightforward, at least in theory. The central bank ...

The Theory of Average Inflation Targeting

Bank of Israel/CEPR Conference on “Inflation: Dynamics, Expectations, and Targeting”. John C. Williams, President and Chief Executive ...

Flexible Average Inflation Targeting and Inflation Expectations

The change implies that if inflation has been running persistently below the target, the FOMC will likely aim to achieve inflation moderately above the target ...