Price-level and interest-rate targeting in a model with sticky prices

Charles Carlstrom () and Timothy S. Fuerst ()

No 9819, Working Paper from Federal Reserve Bank of Cleveland

Abstract: An examination of a standard sticky-price monetary model whose conditions are perturbed relative to the canonical real-business-cycle model by two varying distortions: marginal cost and the nominal rate of interest. The paper explores the implications of two monetary policies that are frequently advocated: (1) an inflation target and (2) an interest rate target.

Keywords: Monetary policy; Inflation (Finance) (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-dge and nep-mon
Date: 1998
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