Optimal horizons for inflation targeting

Working papers set out research in progress by our staff, with the aim of encouraging comments and debate.
Published on 21 July 2000

Working Paper no. 119
By Nicoletta Batini and Edward Nelson

In this paper we investigate the problem of selecting an optimal horizon for inflation targeting in the United Kingdom. There are two key ways of thinking about an optimal horizon, so we look at optimal horizons for both of these interpretations. In addition, to see whether our results are robust in the face of model uncertainty, we compute optimal horizons for two different models with divergent structural and dynamic characteristics.

PDFOptimal horizons for inflation targeting

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