Ben Bernanke Fansite

Ever heard of Ben Bernanke? No? Then you probably haven’t heard of Bernanke Inflation Targeting before, either. It’s not a simple concept, so brace yourselves.

In a nutshell inflation targeting is a policy wherein a central bank – in other words, the institution responsible for setting money policy for the rest of the parts of the country, in the case of the United States those same states – estimates and makes public a set – or target – inflation rate, and then tries to steer the inflation rate towards that target, mainly through using interest rates among other things at their disposal.

Why would anybody bother with this? Especially Ben Bernanke? Well, Bernanke is the current chairman of the U.S. Federal Reserve, so he’s heavy into economics. As for the rest of the country, however, if you have a set inflation rate that’s basically confirmed by the central bank then it’s much easier to calculate interest rates.