Discussion of Designing Inflation Targets

The range of issues relevant to the design of an inflation-targeting framework means that a fully comprehensive review is a very substantial task. Haldane has wisely narrowed down his field of discussion to three questions: what level to set an inflation target?; over what horizon?; and should inflation forecasts be published? Haldane makes a very welcome contribution to all of these topics. The paper covers a sufficiently wide scope of empirical and practical issues to preclude a detailed discussion of them all in the space available. The comments below therefore focus on the twin themes of goals versus operational policy and the role of transparency. In terms of the latter, I comment on some practical issues associated with the Reserve Bank of New Zealand’s recent moves to increase the transparency of its operations. Finally, some brief comments are offered on the literature on the costs of inflation and disinflation.