Saturday, March 22, 2008

Volcker doesn't like Inflation targeting

From an interview Volcker gave to Bloomberg in 2006;

Volcker was skeptical that inflation targeting, a device for anchoring inflation expectations embraced by Bernanke, would be helpful.

``That's a little too precise for me,'' he said. ``The inflation rate is bound to go up and down a little bit and it should go up and down a little bit. But I would like to see stability as the target.''

He suggested that Bernanke, who has championed better communication through transparency at the central bank, may be communicating too much.

``It's kind of ironic,'' said Volcker. ``Mr. Bernanke seems to be criticized for a little too much transparency.''

No comments: