FOMC Targets, Base Drift and Inflationary Expectations

Charles Hegji
Additional contact information
Charles Hegji: Auburn University

Eastern Economic Journal, 1989, vol. 15, issue 1, 45-54

Abstract: This paper uses a money supply-money demand model to study the effects on inflationary expectations of base drift and the Federal Open Market Committee's rebasing of its money supply targets. It is demonstrated that an averaging scheme for determining the Federal Open Market Committee's money stock target bases generates less inflationary uncertainty than no averaging. It is also shown that an alternative to target averaging is to accommodate long-run money supply strategy to changes in money demand. The accommodation of the money supply targets to changes in the demand for money is also shown to be characteristic of target rebasing.

Date: 1989
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://web.holycross.edu/RePEc/eej/Archive/Volume15/V15N1P45_54.pdf (application/pdf)

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:eej:eeconj:v:15:y:1989:i:1:p:45-54

Access Statistics for this article

Eastern Economic Journal is currently edited by Cynthia A. Bansak, St. Lawrence University and Allan A. Zebedee, Clarkson University

More articles in Eastern Economic Journal from Eastern Economic Association Contact information at EDIRC.
Bibliographic data for series maintained by Victor Matheson, College of the Holy Cross ().