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Nominal Income Targeting in an Open-Economy Optimizing Model

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  • McCallum, Bennett T.

    ()
    (Carnegie Mellon University)

  • Nelson, Edward

    (Bank of England)

Abstract

The purpose of this paper is to examine the merits of monetary policy rules that utilize as their principal target variable the level or growth rate of some aggregate measure of nominal spending, such as nominal GDP, rather than a monetary aggregate or an index of inflation. The main objective is to develop new results concerning the possible desirability of nominal income targeting in the context of a quantitative structural macroeconomic model that represents an improved and extended version of the semi-classical framework presented in Mc-Callum and Nelson (1998).

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Bibliographic Info

Paper provided by Stockholm University, Institute for International Economic Studies in its series Seminar Papers with number 644.

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Length: 44 pages
Date of creation: 01 Aug 1998
Date of revision:
Handle: RePEc:hhs:iiessp:0644

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Postal: Institute for International Economic Studies, Stockholm University, S-106 91 Stockholm, Sweden
Phone: +46-8-162000
Fax: +46-8-161443
Web page: http://www.iies.su.se/
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Keywords: nominal income targeting; open-economy; monetary policy;

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References

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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  8. Bennett T. McCallum, 1997. "The Alleged Instability of Nominal Income Targeting," NBER Working Papers 6291, National Bureau of Economic Research, Inc.
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  26. Taylor, John B., 1993. "Discretion versus policy rules in practice," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 39(1), pages 195-214, December.
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  31. Bennett T. McCallum & Edward Nelson, 1997. "An Optimizing IS-LM Specification for Monetary Policy and Business Cycle Analysis," NBER Working Papers 5875, National Bureau of Economic Research, Inc.
  32. Julio Rotemberg & Michael Woodford, 1997. "An Optimization-Based Econometric Framework for the Evaluation of Monetary Policy," NBER Chapters, in: NBER Macroeconomics Annual 1997, Volume 12, pages 297-361 National Bureau of Economic Research, Inc.
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Citations

Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:
  1. Central Banks Can Phase in Nominal GDP Targets without Losing the Inflation Anchor
    by jfrankel in Jeff Frankels Weblog on 2012-12-26 02:59:14
  2. Friedman provided a theory for NGDP targeting
    by Lars Christensen in The Market Monetarist on 2011-11-06 08:18:19
  3. Nominal GDP Targeting Could Take the Place of Inflation Targeting
    by jfrankel in Jeff Frankels Weblog on 2012-06-13 22:10:10
  4. Jeff Frankel restates his support for NGDP targeting
    by Lars Christensen in The Market Monetarist on 2012-06-14 06:19:22
  5. "Inflation Targeting is Dead"
    by Mark Thoma in Economist's View on 2012-06-14 12:26:56
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