Question
What is a good Opinion About the information underlined below 1. Some economists believe the Federal Bank should prioritize targeting inflation rate because it makes
What is a good Opinion About the information underlined below
1. Some economists believe the Federal Bank should prioritize targeting inflation rate because it makes the goals of the Federal reserve more transparent for the public and government. Making a public number to target that they can then be measured by just makes tracking progress very easy. They are trying to solve the problem of not being able to easily measure results of the reserve.
2. Targeting inflation allows for an more commonly understandable metric in order to judge the Fed's performance against. The way it is now, the Fed doesn't have a true way to easily measure whether it is successful. At least with a number target, it would be simple to determine.
3. Other economists feel that putting all priorities of the Federal Reserve behind strictly targeting an inflation rate, would handicap it from other types of goals and methods it can pursue that are not so apparently and visibly measurable.
4. The European Central Bank has a primary objective of maintaining price level. Because of that their main goal is to not let prices change. The US Fed pursues maximum employment as well as stable prices. Sometimes these two policies are at odds with each other. Whereas in the EU their primary goal is price stability. Secondary to that is everything else.
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