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(Post) Keynesian alternative to inflation targeting

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  • Angel Asensio

    (CEPN - Centre d'Economie de l'Université Paris Nord (ancienne affiliation) - UP13 - Université Paris 13 - CNRS - Centre National de la Recherche Scientifique)

Abstract

While the mainstream policies can not be surpassed in the enchanted ‘optimizable'world, (Post) Keynesians have to resign themselves to manage without magic wand inthe uncertain real world. The paper discusses the monetary rules proposed in the recentPost Keynesian literature. It argues that the long-term interest rate is too imperfectlycontrolled for such rules being feasible. Consequently, the quest for credibility isirrelevant, for it makes not much sense to wonder whether authorities will honour theircommitment on an unfeasible ideal target. The right question is whether authoritiespursue convincing objectives so as to move the conventional expectation of the future(and the related interest rate) towards full employment. It is a matter of confidence.The basic principles involved in such an approach to economic policy are discussed.

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  • Angel Asensio, 2008. "(Post) Keynesian alternative to inflation targeting," Post-Print halshs-00335560, HAL.
    • Handle: RePEc:hal:journl:halshs-00335560
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-00335560
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    References listed on IDEAS

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    Cited by:

    1. Angel Asensio, 2008. "The growing evidence of Keynes's methodology advantage and its consequences within the four macro-markets framework," Post-Print halshs-00189221, HAL.

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    Keywords

    Interest rate rule; Inflation targeting; PostKeynesian; Monetary policy;
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