Explain how inflation targeting operates in the UK and Critically evaluate the benefits of inflation targeting - Essay Example

Only on StudentShare

Extract of sample
Explain how inflation targeting operates in the UK and Critically evaluate the benefits of inflation targeting

Inflation is all about price stability and it has been agreed by the economist that a rate of between (0-3) percent is the good enough rate fro the economy. With stable prices at that rate, consumer confidence is raised hence propelling the economy, if the consumer confidence is lower, then the economy will be stuck (Ben 2003). Inflation can only be made success through central banks making price stability its primary objective through strong institutional commitment to attaining that. United Kingdom was not the first country to introduce the inflation instead there are countries like Canada which did it ahead of them. Many countries over time have followed suit to introduce the inflation targeting within their economies with many others looking for technical assistance to help them introduce it (Richard 2005). Japan is one of the few who have not adopted it yet because of its well developed economy with rather stable inflation rate. UK inflation is therefore currently more stable in comparison with the past performance. UK quit ERM in 1992 due to rising tension between having to follow a tight policy framework in order to maintain existing exchange rate and the other option of having to cut the domestic downfall by taking down interest rates it (Richard 2005). ...Show more

Summary

How inflation targeting operates in the UK and critically evaluates the benefits of inflation targeting Name College Course Date How inflation targeting in the UK operates Inflation targeting is a move by the central bank to set a specific inflation target which will then be achieved by either raising interest rates or lowering it…
Author : klockocyrus
Save Your Time for More Important Things
Let us write or edit the essay on your topic
"Explain how inflation targeting operates in the UK and Critically evaluate the benefits of inflation targeting"
with a personal 20% discount.
Grab the best paper

Related Essays

Inflation
Simply put, inflation refers to the rise in the prices of goods and services in a given economy for a given period of time. When such a thing happens, it therefore means that each unit of currency in that particular economy buys fewer goods than what it could have purchased initially before the inflation.
3 pages (750 words) Research Paper
Interactive illustration in print media targeting children's market(under12)
Children in today’s generation are ‘digital’ in the true sense of the word as they are growing up amidst a highly technological environment and are surrounded by innovative technological gadgets which are specifically targeted at them. The growing market for children’s video games, and immense growth in the field of technology has led to the further strengthening of the interactive media, thus taking away the importance of print media.
20 pages (5000 words) Thesis
Inflation and Real Rates of Return
Nominal interest rate is the interest rate which does not take inflation into account hence giving an unrealistic number. Real interest rate is the rate that has been inflation adjusted. It removes the effects of inflation to reflect the real cost of funds to the borrower, and the real yield to the lender.
6 pages (1500 words) Essay
Impact of Inflation in World Economics
Since the inflation rate had been enormously rising after the global financial crisis during the year 2008, several governments of the Asian countries have initiated various remedial steps. However, the steps cannot, at once, eradicate inflation; rather they are aimed towards minimisation of the adverse impacts of inflation upon the growth of economy to a definite extent.
8 pages (2000 words) Dissertation
International Financial Markets: Exchange Rates and Inflation
Levene (2009, 6) asserts that information is extremely crucial because it enable foreign investors to make solid decisions without buying information about the stocks and financial markets. Many companies have unified their accounting standards and financial data for the potential investors to access such information.
7 pages (1750 words) Coursework
Article Review: Money and Inflation
There are different types of investing one is through investing through physical capital; this is where the any particular firm invests through buying capital so as to improve their state. Through this investment physical capital is involved to earn higher profits in future of the firm.
3 pages (750 words) Essay
Growth rates and inflation rate
Inflation entails an increase in the prices of basic commodities within a specified period of time.Growth rates indicate the size of the economy as a result government strategies such as creation of employment, increasing the level of investment, maintaining minimum wage, reducing interest rates and creating competition among other policies.
3 pages (750 words) Essay
CURRENT ISSUES IN FINANCIAL REPORTING
Off-balance-sheet-items are financial obligations or rights a company does not report on its balance sheet even though they have a substantial effect on the financial activities of a
6 pages (1500 words) Essay
Find out how much would it cost
to get a custom paper written by a pro under your requirements!
Win a special DISCOUNT!
Put in your e-mail and click the button with your lucky finger
Your email
YOUR PRIZE:
Apply my DISCOUNT