Masaaki Shirakawa was Bank of Japan Governor from April 2008 until March 2008.
He expressed his opinion in a piece written for the IMF.
- He said the prior to the recent spike in inflation, many central banks in advanced economies were "overwhelmingly" concerned about low inflation, and failed to restrain rapid price gains by judging them as transitory
- By allowing inflation to overshoot their targets, central banks "forgot the difficulty of taking away the monetary punch bowl" and failed to tighten policy soon enough
- "Inflation targeting itself was an innovation that came about in response to the severe stagflation of the 1970s and early 1980s. There is no reason to believe it is set in stone," Shirakawa said. "Now that we know its limitations, the time is ripe to reconsider the intellectual foundation on which we have relied for the past 30 years and renew our framework for monetary policy,"
Info via Reuters
