Inflation, Employment, and Monetary Policy: Objectives and Outcomes in the UK and U.S. Compared

David Miles

Journal of Money, Credit and Banking, 2014, vol. 46, issue S2, 155-167

Abstract: This paper explores how sensitive is monetary policy to the precise preferences of the central bank over inflation and economic activity. It does so in order to address a puzzle—which is that the U.S. Fed and the Bank of England appear to have quite different objectives and yet have adopted strikingly similar policies in recent years. I use a calibrated model to assess how policy might be sensitive to attaching different weights to inflation, output, and the output gap in central bank objectives. I find that a wide range of weights can give rise to rather similar monetary policies.

Date: 2014
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https://doi.org/10.1111/jmcb.12156

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Persistent link: https://EconPapers.repec.org/RePEc:wly:jmoncb:v:46:y:2014:i:s2:p:155-167

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