Abstract
The recent debate over monetary strategies concludes that monetary and inflation targeting lead to very similar patterns of central bank behavior. Why, then, do central banks insist on the strategies they use. In this paper, we develop an answer from political economy, arguing that monetary strategies are helpful in solving internal and external coordination problems for the central bank. We illustrate the point by reviewing the Bundesbank's experience with money growth targeting in the mid-1970s. Monetary targeting was a signal that the previous monetary regime had been overcome, and a means to define the role of monetary policy vis-à-vis other players in the macroeconomic policy game, and to structure the internal monetary policy debate.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
