The inflation-targeting framework from an historical perspective

Quarterly Bulletin 2005 Q2
Published on 20 June 2005

By Luca Benati of the Bank’s Monetary Assessment and Strategy Division.

This article provides an historical perspective on the post-1992 inflation-targeting regime in the United Kingdom. It assesses nearly 400 years of UK economic history using three alternative gauges of stability: business-cycle fluctuations, the Phillips correlation between inflation and unemployment and the degree of inflation persistence. The first of these measures suggests that the inflation-targeting regime has been characterised by the most stable macroeconomic environment in recorded UK history. The second points to a significant improvement in the stability of the Phillips inflation-unemployment correlation during the post-1992 period. The third stability measure suggests that inflation persistence in the United Kingdom has been the exception, not the rule.

PDFThe inflation-targeting framework from an historical perspective

Other Quarterly Bulletin 2005 Q2 articles

Was this page useful?
Add your details...