In this article we propose a policy framework for inflation targeting that contains elements of both optimal and simple rules. We use a simple feedback rule for the interest rate to look after monetary policy in the long run whilst using optimal control in the short run to determine appropriate...

Economic forecasts are usually presented as point estimates, despite the margin of uncertainty which surrounds them. In November 1995 the National Institute began to present estimates of the probability of the government's inflation target being met and of there being a fall in GDP. This article...