Journal Article
Monetary policy rules and stability: inflation targeting versus price-level targeting
Abstract: Monetary policy rules help central banks exercise the discipline necessary to achieve their long-term goals. The type of rule many banks are turning to these days is inflation targeting, which has several advantages. But because banks base their actions on forecasts of future inflation, following the rule can lead to inflation-rate instability in some cases. A price-level target offers the same benefits as an inflation target but, because actions are based on past inflation, it avoids this vulnerability.
Keywords: Banks and banking, Central; Monetary policy; Inflation (Finance);
Access Documents
File(s):
File format is text/html
https://fraser.stlouisfed.org/title/4515/item/627755
Description: Full Text
Bibliographic Information
Provider: Federal Reserve Bank of Cleveland
Part of Series: Economic Commentary
Publication Date: 2002
Issue: Feb
Order Number: 2