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An Evaluation of Inflation Targeting in Germany and the UK
Frowen, Stephen F. | Karakitsos, Elias
Credit and Capital Markets – Kredit und Kapital, Vol. 30 (1997), Iss. 4 : pp. 501–532
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Stephen F. Frowen, London
Elias Karakitsos, London
References
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Abstract
The authors compare the policies and results of the British and German authorities towards the control of inflation since the 1950s. They contrast and explain the long-term emphasis on price stability in Germany with the variable experiences in Britain which have resulted from political pressures, a less stringent and less consistent attitude towards price stability until the 1990s, and the different status of the central bank. The trends in monetary policy and implementation problems in Britain since leaving the ERM in 1992, including the new framework of monetary policy announced by the Labour government elected on May 1 1997, are reviewed, and the authors offer a theoretical framework for comparing inflation targeting, supported by detailed figurative analyses.