To use the wonderful phrase coined by Mervyn King, the Governor-designate of the 10 inflation-targeting Bank of England, there are no "inflation nutters" heading major central banks. Moreover, virtually all (I am tempted to say "all") recent research on inflation targeting takes for granted that stabilization of output and employment is an important policy objective of the central bank.
11 In short, in both theory and practice, today all inflation targeting is of the flexible variety. A second, more serious, issue is the relative weight, or ranking, of inflation and unemployment (or, more precisely, the output gap) among the central bank's objectives. Countries differ in this regard, 12 both in formal mandate and in actual practice.