Angel Asensio and Mark Hayes
While mainstream policies may be beyond improvement in the enchanted ›optimizable‹ world, Post Keynesians have to manage without a magic wand in our uncertain world. We discuss the alternative policies proposed in the recent Post Keynesian literature and argue that control of interest rates is too imperfect for such policies to be feasible in general, although they provide useful guidelines and may be successful in favourable circumstances. Consequently, the question of credibility is irrelevant, if this means whether policy-makers will honour their commitment to an unfeasible ideal target. The right question is whether policy is convincing enough to make the conventional state of expectation (and the related interest rate) consistent with full employment. It is all a matter of confidence. The basic principles involved in such an approach to monetary policy are discussed.
Michael Hayes, Donald A. Wilhite, Mark Svoboda and Miroslav Trnka
Giuseppe Fontana, Mark (M.G.) Hayes and Jonathan Perraton
The contributions in this special issue on inflation targeting were presented at the Spring Seminar of the Post Keynesian Economics Study Group (PKSG) held at Balliol College, Oxford (UK) in April 2008. PKSG was founded in 1988 by Philip Arestis and Victoria Chick. The purpose of the Study Group (now formally a professional association) is to encourage collaboration among scholars and students of Post Keynesian economics, defined broadly as economics centred on the principle of effective demand. A detailed account of the history of PKSG can be found in Hayes (2008).