منابع مشابه
Price Level Targeting vs. Ination Targeting: A Free Lunch?
Price level targeting (without base drift) and ination targeting (with base drift) are compared with persistence in output (generated by sticky prices, for instance). Counter to conventional wisdom, price level targeting results in lower short-run ination variability than ination targeting (if output is at least moderately persistent). Price level targeting also eliminates any average inati...
متن کاملPrice Level Targeting and Stabilization Policy
We construct a dynamic stochastic general equilibrium model to study optimal monetary stabilization policy. Prices are fully exible and money is essential for trade. Our main result is that if the central bank pursues a price-level target, it can control ination expectations and improve welfare by stabilizing short-run shocks to the economy. The optimal policy involves smoothing nominal inter...
متن کاملPrice-level targeting versus inflation targeting over the long-term
This paper investigates the long-term impact of price-level targeting on social welfare in an overlapping generations model in which the young save for old age by investing in productive capital and indexed and nominal government bonds. A key feature of the model is that the extent of bond indexation is determined endogenously in response to monetary policy as part of an optimal commitment Rams...
متن کاملWhen Is Price-Level Targeting a Good Idea?
This paper critically examines a new literature that supports price-level targeting (PT) over inflation targeting (IT).1 This literature shows that it is better for the central bank (the Bank) to gradually wrestle the price level, rather than the inflation rate, back to the target path. PT provides a firm nominal anchor for expectations, and thereby conditions private sector expectations in a w...
متن کاملPrice-Level versus Inflation Targeting in a Small Open Economy
This paper compares two types of monetary policy: price-level targeting and inflation targeting. It reviews recent arguments that favour price-level targeting, and examines how certain factors, such as the nature of the shocks affecting the economy and the degree to which agents are forwardlooking, bear upon the arguments. The paper then extends the analysis to a small open economy such as Cana...
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ژورنال
عنوان ژورنال: SSRN Electronic Journal
سال: 2014
ISSN: 1556-5068
DOI: 10.2139/ssrn.2395493