Monetary Targeting and Policy Credibility in a Non-Market-Clearing Model

Michael Bleaney

Economic Journal, 1991, vol. 101, issue 406, 473-82

Abstract: A simple macroeconomic model is used to examine issues of monetary policy credibility. In this model, prices do not clear the market and output may be demand-constrained. The results differ from those that emerge from the natural-rate models commonly used. Disinflation has an inevitable unemployment cost, which may be prolonged under certain conditions. Preannounced monetary targets act as a device to signal a disinflationary policy stance. In a context of incomplete information, it is likely that the private sector will test out the government's commitment to disinflation. Copyright 1991 by Royal Economic Society.

Date: 1991
References: Add references at CitEc
Citations:

Downloads: (external link)
http://links.jstor.org/sici?sici=0013-0133%2819910 ... 0.CO%3B2-Z&origin=bc full text (application/pdf)
Access to full text is restricted to JSTOR subscribers. See http://www.jstor.org for details.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ecj:econjl:v:101:y:1991:i:406:p:473-82

Ordering information: This journal article can be ordered from
http://www.blackwell ... al.asp?ref=0013-0133

Access Statistics for this article

Economic Journal is currently edited by Martin Cripps, Steve Machin, Woulter den Haan, Andrea Galeotti, Rachel Griffith and Frederic Vermeulen

More articles in Economic Journal from Royal Economic Society Contact information at EDIRC.
Bibliographic data for series maintained by Wiley-Blackwell Digital Licensing () and Christopher F. Baum ().