Inflation targeting drawbacks in the absence of a 'natural' anchor

Angel Asensio (1)

1 CEPN - Centre d'Economie de l'Université Paris Nord (ancienne affiliation)

The economic performances of the Eurozone look weaker than those of the United States over
the period 1999-2006, in spite of the fact that the former applies more thoroughly the 'new
macroeconomics' governance rules concerning public deficits and inflation control. The
literature emphasizes Alan Greenspan's pragmatism when discussing the relative success of
the Fed, but the reasons why pragmatism ought to do better than a thorough application of the
'new macroeconomics' theoretical recommendations remain unexplored. The paper focuses on
the advantage of monetary policy pragmatism in the face of Keynesian uncertainty. More
specifically, it points out the trials of the 'new macroeconomics' principles of monetary policy
when they are implemented in a Keynesian context, that is, within a system which does not
have any 'natural' anchor.

Mots clés: Monetary policy; Post Keynesian; Uncertainty

Domaines: Economies et finances

Angel Asensio. Inflation targeting drawbacks in the absence of a 'natural' anchor: A Keynesian appraisal of the FED and ECB policies over the period 1999-2006. PostKeynesian economic policy, 2d bi-annual Dijon Conference of the CEMF, Université de Bourgogne., Nov 2007, Dijon, France. ⟨halshs-00189225⟩