The more difficult question is: How suboptimal are inflation-targeting regimes that recognize the costs of excessive output variability, but nevertheless constrain monetary policymakers from responding to deviations of output from its target, except when the inflation target has already been met or when policymakers can project that it will be met in a reasonable period?
In my view, such regimes are likely to remain suboptimal, compared with a more flexible dual-mandate regime. Transparency, accountability, and the dual mandate As I noted, transparency about monetary policy requires a full and accurate account of the objectives.