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Defining price stability: what should we aim for?

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  • Craig Ebert

    (Reserve Bank of New Zealand)

Abstract

This article explores many of the issues that underlay the choice of the 0 to 2 per cent inflation target in the Policy Targets Agreement as the best operational formulation of the Bank's requirement to pursue stability in the general level of prices.

Suggested Citation

  • Craig Ebert, 1994. "Defining price stability: what should we aim for?," Reserve Bank of New Zealand Bulletin, Reserve Bank of New Zealand, vol. 57, March.
    • Handle: RePEc:nzb:nzbbul:march1994:2
    as

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    File URL: http://www.rbnz.govt.nz/-/media/ReserveBank/Files/Publications/Bulletins/1994/1994mar57-1ebert.pdf
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    References listed on IDEAS

    as
    1. Pierre Fortin, 1991. "The Phillips Curve, Macroeconomic Policy, and the Welfare of Canadians," Canadian Journal of Economics, Canadian Economics Association, vol. 24(4), pages 774-803, November.
    2. Christina D. Romer & David H. Romer, 1989. "Does Monetary Policy Matter? A New Test in the Spirit of Friedman and Schwartz," NBER Chapters, in: NBER Macroeconomics Annual 1989, Volume 4, pages 121-184, National Bureau of Economic Research, Inc.
    3. Samantha Johnson, 1993. "The costs of inflation revisited," Reserve Bank of New Zealand Bulletin, Reserve Bank of New Zealand, vol. 56, March.
    4. Ball, Laurence, 1991. "The Genesis of Inflation and the Costs of Disinflation," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 23(3), pages 439-452, August.
    5. Blanchard, Olivier J, 1984. "The Lucas Critique and the Volcker Deflation," American Economic Review, American Economic Association, vol. 74(2), pages 211-215, May.
    6. Backus, David & Driffill, John, 1985. "Inflation and Reputation," American Economic Review, American Economic Association, vol. 75(3), pages 530-538, June.
    7. Robert J. Gordon, 1983. "The Conduct of Domestic Monetary Policy," NBER Working Papers 1221, National Bureau of Economic Research, Inc.
    8. David Rae, 1993. "Measuring inflation," Reserve Bank of New Zealand Bulletin, Reserve Bank of New Zealand, vol. 56, March.
    9. David E. Lebow & John M. Roberts & David J. Stockton, 1992. "Economic performance under price stability," Working Paper Series / Economic Activity Section 125, Board of Governors of the Federal Reserve System (U.S.).
    10. Friedman, Benjamin M., 1979. "Optimal expectations and the extreme information assumptions of `rational expectations' macromodels," Journal of Monetary Economics, Elsevier, vol. 5(1), pages 23-41, January.
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    Cited by:

    1. Paul Dalziel, 1997. "Setting the Reserve Bank’s Inflation Target: The New Zealand Debate," Agenda - A Journal of Policy Analysis and Reform, Australian National University, College of Business and Economics, School of Economics, vol. 4(3), pages 285-296.
    2. Craig Ebert, 1994. "The indicator role of asset prices," Reserve Bank of New Zealand Bulletin, Reserve Bank of New Zealand, vol. 57, September.

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