The A W Phillips memorial lecture to the New Zealand Association of Economists: Monetary Policy – should it move onto a price level target?
AbstractWe examine whether inflation targeting should be regarded as optimal. Targeting inflation implies (undesirably) that price level variance tends to infinity: we produce some evidence from both a representative agent model and a long-used forecasting model that, once an endogenous indexation response is allowed for, price level targeting imposes no extra costs of macro variability, indeed gives significant gains.
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Bibliographic InfoPaper provided by EconWPA in its series Macroeconomics with number 0409020.
Length: 20 pages
Date of creation: 22 Sep 2004
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montary policy targeting;
Find related papers by JEL classification:
- E - Macroeconomics and Monetary Economics
This paper has been announced in the following NEP Reports:
- NEP-ALL-2004-09-30 (All new papers)
- NEP-HPE-2004-09-30 (History & Philosophy of Economics)
- NEP-MAC-2004-09-30 (Macroeconomics)
- NEP-MON-2004-09-30 (Monetary Economics)
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