Issues Concerning Nominal Anchors for Monetary Policy
AbstractThis paper presents a selective survey of issues relevant to the choice of nominal anchors for monetary policy. Section I reviews long price-level histories for the United Kingdom and United States, which reveal that the price level behaved very differently following WWII in these countries than it had done in previous post-war experiences. In particular following WWII the responsibilities of monetary policy expanded to encompass a business-cycle stabilization role and the nominal anchor shifted from the fixed anchor or price-level stability to the moving anchor of inflation-rate stability. The remaining sections of the paper review, in the context of a variety of models, some of the considerations that are relevant to setting the average inflation rate in countries without a fixed nominal anchor.
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Bibliographic InfoPaper provided by International Monetary Fund in its series IMF Working Papers with number 94/61.
Date of creation: 01 May 1994
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Other versions of this item:
- Robert Flood & Michael Mussa, 1994. "Issues Concerning Nominal Anchors for Monetary Policy," NBER Working Papers 4850, National Bureau of Economic Research, Inc.
- F30 - International Economics - - International Finance - - - General
- E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Sytsems; Standards; Regimes; Government and the Monetary System
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- Raoul Lättemäe, 2002.
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- C.A. Sims, 1999. "The Precarious Fiscal Foundations of EMU," DNB Staff Reports (discontinued) 34, Netherlands Central Bank.
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