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T he government of Prime Minister Shinzo Abe and the Bank of Japan agreed last week to set a 2 percent inflation target to be achieved “as soon as possible.” All sorts of issues have been raised, from the dangers of intervening in monetary policy to the waning independence of the central bank, but there are many problems inherent with inflation targeting.

The first problem is that the joint accord merely clarified their target — 2 percent inflation — without specifying the tools to be used to achieve it.

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