I found some of the dialogue around Ben Bernanke, the potential replacement of Federal Reserve chairman Alan Greenspan, quite interesting. It felt like a debate about goal-setting. According to a recent Associated Press article by Rachel Beck:
“If Bernanke is confirmed, the central bank could for the first time in its history adopt a specific target for the inflation rate and then make adjustments to interest rates as a way of trying to keep it in that range.”
Greenspan, on the other hand “has been against setting an actual ‘inflation target,’ whereby the Fed discloses its goal and its forecast for inflation. His view is that the Fed can control inflation without setting a specific rate that it must then chase, which he believes could hamper its flexibility to act in a time of need. That stance has proven successful time and again, including in the last year as energy prices have skyrocketed but the core inflation rate — as measured by the consumer price index excluding energy and food costs — has remained at only around 2 percent, low by most standards.”
They are both interested in low inflation. The question is the means of achieving that. Bernanke appears to be in favor of a goal-oriented approach, whereas Greenspan is more goal-free.
NOTE: I am not an economist. This is only an observation, not an endorsement of one perspective over the other.