The A W Phillips memorial lecture to the New Zealand Association of Economists: Monetary Policy – should it move onto a price level target?

A. Patrick L. Minford

Macroeconomics from EconWPA

Abstract: We examine whether inflation targeting should be regarded as optimal. Targeting inflation implies (undesirably) that price level variance tends to infinity: we produce some evidence from both a representative agent model and a long-used forecasting model that, once an endogenous indexation response is allowed for, price level targeting imposes no extra costs of macro variability, indeed gives significant gains.

Keywords: montary; policy; targeting (search for similar items in EconPapers)
JEL-codes: E (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-hpe, nep-mac and nep-mon
Date: 2004-09-22
Note: Type of Document - pdf; pages: 20

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Persistent link: http://EconPapers.repec.org/RePEc:wpa:wuwpma:0409020

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