Home > Analogy, Federal Reserve > Average-Inflation Targeting, In a Nutshell

Average-Inflation Targeting, In a Nutshell


Let the bow-tie set argue about the niceties and the nuances. Here is what I can tell you about inflation targeting so that we can all understand the debate: suppose they changed the rules of baseball in an analogous way.

A new pitcher comes in to the game. He throws a pitch over the batter’s head. His next pitch skips behind the batter. His third pitch sails 2 feet high and outside. His fourth pitch almost hits the mascot.

“Yer out!” barks the umpire. Because the four pitches averaged out to strikes. My questions:

  1. I don’t know that the new rule gives me any greater confidence in the pitcher.
  2. It isn’t clear to me how that rule would help the batter.
  3. Maybe this helps a bad pitcher. But I wonder why a good pitcher would need that rule.

That is all.

  1. No comments yet.
  1. September 11, 2020 at 9:52 am

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.

%d bloggers like this: