Discussion Paper Details

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Title: The First Year Of The Eurosystem: Inflation Targeting Or Not?

Author(s): Lars E.O. Svensson

Publication Date: February 2000

Keyword(s): ECB, Monetary targeting and Transparency

Programme Area(s): International Macroeconomics

Abstract: This paper is a brief evaluation of the Eurosystem's monetary-policy regime after its first year, in particular of the extent to which it is similar to inflation targeting as practiced by an increasing number of central banks. I examine the Eurosystem's goals, framework for monetary-policy decisions and communication with outsiders. Criteria for evaluation are whether the goals are unambiguous and appropriate; whether the decision framework is efficient in collecting and processing information and reaching decisions that are appropriate relative to the goals; and whether the communication is effective in motivating decisions, simplifying external evaluation and thereby improving transparency and accountability. I also consider whether the actual instrument setting has been appropriate, given the information available at the times of decision.

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Bibliographic Reference

Svensson, L. 2000. 'The First Year Of The Eurosystem: Inflation Targeting Or Not?'. London, Centre for Economic Policy Research.