Inflation targeting requires monetary policymakers to rely heavily on the Phillips curve.

Question

Quizplus · Accepted Answer

Inflation targeting involves setting a specific target for inflation and using monetary policy tools to achieve it. The Phillips curve describes the relationship between unemployment and inflation, which is often used by central banks to make decisions about interest rates and other policy actions. As a result, inflation targeting policies may rely heavily on the Phillips curve as a key tool for understanding the economy and making policy decisions.

Inflation Targeting Requires Monetary Policymakers to Rely Heavily on the Phillips