What does IT stand for?

Stevens, who gave testimony to the Senate Committee earlier this week, said that while borrowing costs are "unusually low" and will need to go back to normal levels, inflation targeting will guide the timing of adjustment to "more normal levels".

Inflation targeting is a monetary policy framework in which a central bank attempts to keep inflation within a declared target range, typically by adjusting interest rates.

Topics include a Korean case study of the role of the exchange rate in inflation targeting; the theoretical behavior of economies under inflation targeting regimes and its implications for the Czech Republic, Hungary, Poland, and Slovakia as they prepare to join the European Monetary Union; inflation targeting and market volatility in the case of Israel; the macrodynamics of inflation, deflation, and employment; evidence for developing countries on the effects of exchange rate fluctuations on price; assessment of US inflation as a persistent variable; inflation, unemployment, and labor force change in European countries; and linkages between monetary policy, inflation, output, and unemployment in the Euro Zone.

Many countries use inflation targeting as a means of gaining credibility.

Ben Bernanke has been an outspoken advocate of inflation targeting on the British model but stopped short of fully endorsing such a policy at his Senate confirmation hearings.

He also indicated he would favour inflation targeting as adopted by the Bank of England, but wouldn't rush to change.

3) This paper shows that this difference between price-level targeting and inflation targeting is sufficient to cause price-level targeting to be superior to inflation targeting under a reasonable set of assumptions.

Introduction Since the beginning of the 1990s, several countries have adopted an inflation targeting framework for monetary policy.