Price Level Targeting vs. Ination Targeting: A Free Lunch?

Stabilisation policy, rational expectations and price-level versus ination targeting: a survey

We survey literature comparing in‡ation targeting (IT) and price-level targeting (PT) as macroeconomic stabilisation policies. Our focus is on New Keynesian models and areas that have seen signi…cant developments since Ambler’s (2009) survey: optimal monetary policy; the zero lower bound; …nancial frictions; and transition costs of adopting a PT regime. Ambler’s conclusion that PT improves soci...

P-216: Dual Targeting of TNF-? and Free Radicals Toxic Stress as A Promising Strategy to Manage Experimental Polycystic Ovary

Optimal Monetary Policy in a Model with Habit Formation and Explicit Tax Distortions

A number of recent papers have explored monetary policy options, including inflation targeting and inflation forecast targeting (notably Svensson (1999a, 1999b, 2000)) and price level targeting (Wolman 2000, Batini and Yates 1999, Blinder 1999). Most papers explore “optimal” monetary policy in the context of a single model. However, a number of conclusions made in the literature depend strongly...

Price-Level Targeting and Risk Management in a Low-Inflation Economy

With inflation and policy interest rates at historically low levels, policymakers show great concern about "downside tail risks" due to a zero lower bound on nominal interest rates. Low probability or tail events, such as sustained deflation or recession, are disruptive for the economy and can be difficult to resolve. This paper shows that price-level targeting mitigates downside tail risks res...

The Stabilizing Properties of Floating Exchange Rates: Some International Evidence

This paper analyzes the stabilizing properties of alternative monetary policy regimes. In practice there is a choice between two broad types of monetary policy regimes: a fixed exchange rate regime or a floating exchange rate regime. In this paper I compare exchange rate targeting with different floating exchange rate regimes: strict price level targeting, flexible price level targeting and out...