German Monetary Targeting: A Precursor to Inflation Targeting

Many features of the German monetary targetingregime are also key elements of inflationtargeting in the other countries examined inthis study. Indeed, as pointed out in Bernanke and Mishkin(1997), Germany might best be thought of as a “hybrid”inflation targeter, in that it has more in common withinflation targeting than with a rigid application of amonetary targeting rule. The German experience withmonetary targeting, which spans more than twenty years,provides useful lessons for the successful operation ofinflation targeting, and this is why we study the Germanexperience here.[...]