Inflation Targeting

In order to achieve price stability in New Zealand, the monetary policy Inflation Targeting was adopted in 1990. With the growth and success of this new strategy, Canada, the United Kingdom, Sweden, Spain and many other counties followed suit in the subsequent years ahead.
Inflation targeting is an economic policy in which a monetary authority such as the European Central Bank publicly announces what they are going to do in regards hiring or lowering the inflation rate. They estimate a percentage such as 2 percent a year and make a target inflation rate, then attempt to move the actual inflation rate toward that rate. Through the use of interest rate changes and other monetary tools inflation targeting is possible. Although inflation targeting has many advantages, some countries for see the many disadvantages of low economic growth and too much rigidity.
Many criticize the idea of inflation targeting and how there are disadvantages to this policy. An......

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Title: Inflation Targeting
Approximate Word Count: 386
Approximate Pages: 2 (250 words per double-spaced page)

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