Ten Years' Experience with the Swiss National Bank's Monetary Policy Strategy
In December 1999 the Swiss National Bank (SNB) abandoned monetary targeting and introduced a new monetary policy strategy. The cornerstones of the new framework are an explicit definition of what the SNB considers to be price stability, a forecast of inflation over a three-year horizon, and a target range for the three-month Swiss franc Libor. The strategy lived up to expectations in every respect and contributed to strengthening the SNB's credibility. In particular, the new framework's flexibility proved successful in times of financial stress. The term reference interest rate contains an automatic monetary stabilizer that has insulated the nonfinancial sector from much of the turbulence. The major challenge lying ahead is sustained accuracy in the assessment of future inflation.
Volume (Year): 146 (2010)
Issue (Month): I (March)
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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.:
- Lawrence Christiano & Roberto Motto & Massimo Rostagno, 2007. "Two Reasons Why Money and Credit May be Useful in Monetary Policy," NBER Working Papers 13502, National Bureau of Economic Research, Inc.
- Gersbach, Hans & Hahn, Volker, 2008.
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6761, C.E.P.R. Discussion Papers.
- Baltensperger, Ernst & Fischer, Andreas M. & Jordan, Thomas J., 2007.
"Strong goal independence and inflation targets,"
European Journal of Political Economy,
Elsevier, vol. 23(1), pages 88-105, March.
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