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Practical issues in monetary policy targeting


  • Stephen G. Cecchetti


An outline of the considerable information requirements faced by monetary policymakers, and an examination of the data to see what we actually know and how well we know it. The author's primary conclusion is that the deficiencies of our forecasting ability create uncertainty that leads to cautious policymaking.

Suggested Citation

  • Stephen G. Cecchetti, 1996. "Practical issues in monetary policy targeting," Economic Review, Federal Reserve Bank of Cleveland, issue Q I, pages 2-15.
  • Handle: RePEc:fip:fedcer:y:1996:i:qi:p:2-15

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    References listed on IDEAS

    1. Hirshleifer,Jack & Glazer,Amihai & Hirshleifer,David, 2005. "Price Theory and Applications," Cambridge Books, Cambridge University Press, number 9780521523424, March.
    2. Baumol, William J & Bradford, David F, 1970. "Optimal Departures from Marginal Cost Pricing," American Economic Review, American Economic Association, vol. 60(3), pages 265-283, June.
    3. Jack Beebe & Gary C. Zimmerman, 1982. "Fed pricing," FRBSF Economic Letter, Federal Reserve Bank of San Francisco, issue mar12.
    4. Scott E. Knudson & Jack K. Walton & Florence M. Young, 1994. "Business-to-business payments and the role of financial electronic data interchange," Federal Reserve Bulletin, Board of Governors of the Federal Reserve System (U.S.), issue Apr, pages 269-278.
    5. Roberts, Kevin W S, 1979. "Welfare Considerations of Nonlinear Pricing," Economic Journal, Royal Economic Society, vol. 89(353), pages 66-83, March.
    6. Walter Y. Oi, 1971. "A Disneyland Dilemma: Two-Part Tariffs for a Mickey Mouse Monopoly," The Quarterly Journal of Economics, Oxford University Press, vol. 85(1), pages 77-96.
    7. David B. Humphrey, 1982. "Costs, scale economies, competition, and product mix in the U.S. payments mechanism," Staff Studies 115, Board of Governors of the Federal Reserve System (U.S.).
    8. Gary C. Zimmerman, 1981. "The pricing of Federal Reserve services under MCA," Economic Review, Federal Reserve Bank of San Francisco, issue Win, pages 22-40.
    9. Paul W. Bauer, 1993. "Efficiency and technical progress in check processing," Economic Review, Federal Reserve Bank of Cleveland, issue Q III, pages 24-38.
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    Cited by:

    1. Kui-Wai Li, 2013. "The US monetary performance prior to the 2008 crisis," Applied Economics, Taylor & Francis Journals, vol. 45(24), pages 3450-3461, August.
    2. Alexis Penot, 1998. "La politique monétaire française à travers la règle de Taylor," Revue d'Économie Financière, Programme National Persée, vol. 49(5), pages 135-154.
    3. Philip Lowe & Luci Ellis, 1997. "The Smoothing of Official Interest Rates," RBA Annual Conference Volume,in: Philip Lowe (ed.), Monetary Policy and Inflation Targeting Reserve Bank of Australia.
    4. Engert, Walter & Hendry, Scott, 1998. "Forecasting Inflation with the M1-VECM: Part Two," Staff Working Papers 98-6, Bank of Canada.
    5. Roszbach, Kasper, 1997. "Reaction Function Estimation when Central Banks Face Adjustment Costs," SSE/EFI Working Paper Series in Economics and Finance 155, Stockholm School of Economics.
    6. Marc-Alexandre Sénégas, 2002. "La politique monétaire face à l'incertitude : un survol méthodologique des contributions relatives à la zone euro," Revue d'Économie Financière, Programme National Persée, vol. 65(1), pages 177-200.
    7. J. Kilponen & Marc-Alexandre Sénégas & J. Vilmunen, 2006. "Bayesian versus robust control approach towards parameter uncertainty in monetary policymaking: how close are the outcomes? Some illustrating evidence from the EMU economies," Post-Print hal-00150522, HAL.

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