18 Eggertsson and Woodford (2003) provide an early discussion of how optimal monetary policy at the ELB entails a commitment to reflate the price level during the subsequent economic expansion. Nessén and Vestin (2005) discuss the relationship between average inflation targeting and price-level targeting. There is a dearth of empirical evidence on strategies seeking to make up for inflation deviations.
Central banks that pursue an inflation goal generally seek to achieve a specific rate of inflation by some time horizon— typically a couple of years ahead or over the “medium run”—without regard to past inflation deviations.