Comments on \ In ° ation targeting in transition economies ; Experience and prospects " , by Jiri Jonas and

The paper by Jonas and Mishkin does a very good job of describing the history, the implementation, and the e®ects of in°ation targeting in Central Europe. The description is rich and informative, showing the inconsistencies and the adjustments in monetary policy over time, the con°icts between monetary and ̄scal policy, and the di±culty of achieving in°ation targets. The basic conclusion, which is presented with much honesty, is also convincing: In°ation targeting has not done miracles. But it has led to a decline in in°ation, at an output cost which does not appear excessively high. The paper however does less good a job of discussing the many issues facing in°ation targeters in those countries. It sometimes gives the impression that what remains to be worked out are details of implementation, whether for example to have a point or a band for the in°ation target, or how to choose the time horizon for in°ation targeting. I agree that these are decisions that policy makers must make. But I also believe that there are plenty of hard conceptual issues which have not been solved, and these also need to be tackled, and tackled urgently. This will be the theme of my comments.