Year: 2004
Type: article
Abstract: This paper estimates a simple structural model of monetary policy in the UK focusing on the policy of inflation targeting introduced in 1992. We find that: (i) the adoption of inflation targeting led to significant changes in monetary policy; (ii) post‐1992 monetary policy is asymmetric as policy‐makers respond more to upward deviation of inflation away from the target; (iii) post‐1992 policy‐makers may be attempting to keep inflation within the 1.4%–2.6% range rather than pursuing a point target of 2.5% and (iv) the response of monetary policy to inflation is nonlinear as interest rates respond more when inflation is further from the target.
Source: Economica
Authors: Christopher Martin, Costas Milas
Institutions: Brunel University of London, City, University of London
Language: English
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W1556571794