With surging inflation in advanced economies, it is likely that the adjusted policy frameworks of recent times will shift back to simpler and clearer formulations. Three takeaways from this discussion stand out. One is that inflation-targeting central banks also consider real variables such as growth and unemployment when they make monetary policy decisions.
Second, that central banks don’t drop targeting inflation, even if they have an employment mandate. It simply means they respect the NAIRU and discuss more directly its level and what can happen to inflation when the speed limit implied by it is exceeded.