, Columnist
From New Zealand to New York, Inflation Targets Are So Passe
Japan and Sweden and even the Fed could take a lesson from the Reserve Bank of New Zealand.
Watch this space for good ideas.
Photographer: Birgit Krippner/Bloomberg
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Paul Volcker rightly bemoans the prevalence of narrow inflation targets. Fear not, New Zealand is on the case. Sort of.
Volcker chafes that the 2 percent target adopted by many central banks hampers sound policy making. Giving too much credence to small deviations in consumer price indexes is a trap, he wrote in a Bloomberg Opinion column last week. (He’s also just published a book co-written with Bloomberg’s Christine Harper.)