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Pillars of Globalization: A history of monetary policy targets, 1797-1997

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  • Flandreau, Marc

Abstract

This paper studies the evolution of monetary policy targets over the course of the past 200 years. We argue that policy targets are set as part of an assignment procedure that is intended to address both time consistency and monitoring problems. As a result, central banks, after having been assigned to target the exchange rate in the 19th century, are now entrusted with targeting the rate of inflation. Critical advances in the measurement of inflation have proved decisive in bringing about this radical transformation.

Suggested Citation

  • Flandreau, Marc, 2007. "Pillars of Globalization: A history of monetary policy targets, 1797-1997," CEPR Discussion Papers 6252, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:6252
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    Cited by:

    1. Jagjit S. Chadha & Elisa Newby, 2013. "’Midas, transmuting all, into paper’: the Bank of England and the Banque de France during the Napoleonic Wars," Cambridge Working Papers in Economics 1330, Faculty of Economics, University of Cambridge.
    2. Buiter, Willem H., 2007. "Seigniorage," Economics - The Open-Access, Open-Assessment E-Journal, Kiel Institute for the World Economy (IfW), vol. 1, pages 1-49.
    3. Peter Stella, 2010. "Minimising monetary policy," BIS Working Papers 330, Bank for International Settlements.
    4. Elisa Newby, 2007. "The Suspension of Cash Payments as a Monetary Regime," CDMA Working Paper Series 200707, Centre for Dynamic Macroeconomic Analysis.
    5. Singleton,John, 2010. "Central Banking in the Twentieth Century," Cambridge Books, Cambridge University Press, number 9780521899093, June.

    More about this item

    Keywords

    central banks; exchange rates; inflation; monetary policy targets;

    JEL classification:

    • E1 - Macroeconomics and Monetary Economics - - General Aggregative Models
    • E3 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles
    • E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit

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