The death of inflation targeting?

There are many reasons to think that inflation targeting has had its day. The framework has already evolved to some extent, with central banks adopting “flexible” inflation-targeting and macroprudential tools. But arguably this flexibility does not go far enough; there is a strong case for a wider remit giving central banks the ability to use interest rates to ensure financial, as well as price, stability. While a radical overhaul of frameworks looks unlikely soon, we expect central banks to move gradually in this direction.