Global inflation is back with a vengeance. Yet some academics are calling for an end to inflation targeting by central banks, saying it is too costly.

There is no doubt that the world benefited enormously from the sea change in central bank policy back in 1980 that led to inflation targeting. It was monetary policy, principally initiated by Paul Volcker at the Federal Reserve, that did the heavy lifting of tackling inflation in the early 1980s, killing off stagflation that erroneous policies had embedded in the economic system in the 1970s. Sure, subsequently, globalisation and technology supported the disinflationary trend. But the core driver of disinflation was monetary policy.