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Maximizing Price Stability in a Monetary Economy

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  • Warren Mosler
  • Damiano B. Silipo

Abstract

In this paper we analyze options for the European Central Bank (ECB) to achieve its single mandate of price stability. Viable options for price stability are described, analyzed, and tabulated with regard to both short- and long-term stability and volatility. We introduce an additional tool for promoting price stability and conclude that public purpose is best served by the selection of an alternative buffer stock policy that is directly managed by the ECB.

Suggested Citation

  • Warren Mosler & Damiano B. Silipo, 2016. "Maximizing Price Stability in a Monetary Economy," Economics Working Paper Archive wp_864, Levy Economics Institute.
    • Handle: RePEc:lev:wrkpap:wp_864
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    References listed on IDEAS

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    1. Alan B. Krueger & Judd Cramer & David Cho, 2014. "Are the Long-Term Unemployed on the Margins of the Labor Market?," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 48(1 (Spring), pages 229-299.
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    6. Alan B. Krueger & Judd Cramer & David Cho, 2014. "Are the Long-Term Unemployed on the Margins of the Labor Market?," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 45(1 (Spring), pages 229-299.
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    European Central Bank; Monetary Policy Tools and Price Stability; Buffer Stock Policy;
    All these keywords.

    JEL classification:

    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies

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