Die geldpolitische Konzeption und das Steuerungsverfahren der Deutschen Bundesbank

The Bundesbank's monetary policy with its successful performance in regard to price stability is often seen as a role model for the European Central Bank. Andrea Schächter discusses the Bundesbank's monetary policy framework and describes how this policy has been pursued since 1975. She demonstrates that the strategy of monetary targeting was never stringently adhered to in practice. The Bundesbank based its policy decisions on a number of indicators, among which, the development of the monetary aggregate, played a subordinate role only. Thus the Bundesbank's policy can be labeled as implicit inflation targeting, a strategy which is not advisable for the European Central Bank as a central bank without a track record. The author shows that in order to acquire credibility the ECB should follow a clearly designed strategy of explicit inflation targeting, which will contribute to transparency, flexibility and accountability.