How should central banks define price stability?

Mark Wynne

No 8, Globalization Institute Working Papers from Federal Reserve Bank of Dallas

Abstract: It is now generally accepted that the primary objective of central banks should be the maintenance of price stability. This paper considers the question of how central banks should define price stability. I address three specific questions. First, should central banks target broad or narrow measures of inflation? Second, should central banks target headline or core measure of inflation? And third, should central banks define price stability as prevailing at some positive measured rate of inflation?

Keywords: Inflation (Finance); Financial stability; Price indexes; Monetary policy (search for similar items in EconPapers)
JEL-codes: E5 (search for similar items in EconPapers)
Pages: 37 pages
Date: 2008
New Economics Papers: this item is included in nep-cba, nep-mac and nep-mon
Note: Published as: Wynne, Mark A. (2009), "How Should Central Banks Define Price Stability?," in Designing Central Banks, eds. David Mayes and Geoffrey Wood (London: Routledge), 107-129.
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Citations: View citations in EconPapers (5)

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