# Inflation targeting (also referred to in German as Inflationszielmarke)

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- Modified: 2023-07-25T21:01:51+00:00
- Language: en

## Definition

The central bank sets a maximum acceptable inflation rate, as in the case of the ECB of just below two percent in the medium term. In principle, its monetary policy course is determined by the deviations between the targeted inflation rate and the inflation expectation rate. If the central bank sees a threat to its inflation target, it takes measures to restrict money in circulation. The disadvantage here is that speculative excesses in asset markets - stocks, bonds, real estate - are left out of consideration. However, the ECB includes such speculative bubbles within the framework of its two-pillar principle. - See real estate bubble, inflation, targeting, one-tier, price control. - Cf. Deutsche Bundesbank Monthly Report, January 2010, pp. 30 ff. (detailed presentation; overviews, references). Attention: The financial encyclopedia is protected by copyright and may only be used for private purposes without express consent! University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec. Professor Dr. Eckehard Krah, Dipl.rer.pol. E-mail address: info@ekrah.com https://de.wikipedia.org/wiki/Gerhard_Ernst_Merk https://www.jung-stilling-gesellschaft.de/merk/ https://www.gerhardmerk.de/

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