USA

The United States of America pursued monetary targets more or less strictly from 1975 but downgraded them in the late 1980s, moved gradually towards implicit (unannounced) inflation targets in the 1990s and adopted a formal inflation target from 2012.

Years Targets and attainment Classification
1974 no specific targets but objectives including price stability and growth; monetary policy operated through OMOs and interest rates loosely structured discretion LSD
1975-80 monetary targets, mostly ranges of 2.5-3% for three or four different aggregates, converging slowly and with periodic upward revisions, met 5 years out of 6; major change in operating procedures 1979 towards targeting nonborrowed reserves full converging monetary targeting FCMT
1981-89 monetary targets badly missed 1981-2; from late 1982 more judgemental approach to monetary policy and 1979 operating procedures changes largely reversed; 1983-9 monetary targets have wider ranges, M1 targets dropped 1986; targets badly missed 2 years but met 3 and near-met 2 years; policy concerns include strong and stable dollar as well as growth and price stability loose monetary targeting LMT
1990-95 policy based on a ‘flexible approach to monetary targeting’ with Fed responding to range of indicators as well as monetary growth; wide targets for M2 and M3 met or near-met; first pre-emptive tightening 1994 well-structured discretion WSD
1996-2011 no monetary targets; implicit inflation targeting, without announcement but clear aim of price stability (variously identified); increasing fulfilment of range of usual IT criteria, e.g. transparency; inflation negative in 2009, but expectations remain anchored, other years rough price stability; monetary policy operations centred on Federal funds rate loose inflation targeting LIT
2012-14 FOMC announces January 2012 inflation target of 2% over the medium term; target met on average each year full inflation targeting FIT

Selected IMF references: RED 1976 pp32-6; RED 1979 pp46-9; RED 1980 pp47-50; RED 1983 pp39-43; RED 1985 p51; RED 1987 pp50-3; RED 1988 pp40-1; RED 1991 p24; BP 1993 pp11-12; SR 1994 pp5-8; SR 1996 pp9-11; SR 1997 pp13-15; SR 2002 p18; SI 2005 ch. VI; SR 2011 p54.

Additional sources: Bernanke and Mishkin (1992); Goodfriend (2002, 2003).

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