No wonder some central banks find it difficult to clearly express their approach regarding output stabilisation. A promising example in this respect is the Norgesbank, which is explicit about its flexible approach. Norwegians state openly that they “operate a flexible inflation targeting regime, so that weight is given to both variability in inflation and variability in output and employment” 11 . Also the monetary policy objectives of the Fed are formulated in this vein 12 . It is worth stressing however that the degree of appropriate flexibility in a particular country may depend on the duration of low inflation 13 . Thus the Norwegian case may not be applicable to countries during disinflation or shortly thereafter. Another important question regards the choice of the targeted price index. Should it be headline inflation which is more familiar to the public or core inflation which is less vulnerable to short-term deviations? And what about asset prices? Should they be included in the index? The question of including asset prices into the targeted price index is related to a wider policy debate, namely on the  5  “Although macroeconomic performance improved in most non-industrial countries over the past decade, countries adopting inflation targeting have, on average, outperformed countries with other monetary policy frameworks.” - IMF, “Inflation Targeting and the IMF”, March 2006. Empirical evidence show also that inflation targeters achieve better sustainability records in terms of disinflation, though the findings are statistically not robust – Hofstetter M. “Why have so many disinflations succeded?”, Documento Cede 2005-65, November 2005.
Krzysztof Rybiński: Inflation targeting and the challenges ahead Opening remarks by Mr Krzysztof Rybiński, Deputy President of the National Bank of Poland, at the “Inflation Targeting - Third Joint NBP & SNB Seminar on Monetary Policy”, Warsaw, 18-20 May 2006. *  *  *  Ladies and Gentlemen, I am pleased to welcome you at the third seminar on monetary policy organized jointly by the Swiss National Bank and the National Bank of Poland. Let me start by thanking staff members from the host central banks, who have not spared their efforts on preparing this seminar. For the first time in our seminar, apart from economists from the host central banks we have invited representatives of other central banks to share with us their knowledge and experience with inflation targeting. Thus I would like to warmly welcome our guests from the Czech National Bank – the first inflation targeter in Central and Eastern Europe, and from the Central Bank of Turkey – a brand new inflation targeter, which has adopted the framework only this year. The topic of this year’s seminar is inflation targeting (henceforth called IT). As the distinguished former Fed chairman Paul Volcker recently remarked 1 , inflation targeting may sound like an oxymoron since usually central banks strive to fight inflation rather than to breed it. So should we gather here to discuss ways of breeding inflation?