 Price Stability and Financial Fragility (1995)C. A. E. Goodhart
Chapter 14 in The Central Bank and the Financial System, 1995, pp 263-302 from Palgrave Macmillan Abstract: Abstract If asked to provide a practical, quantitative definition of price stability, most people would offer something like a rate of increase in the RPI, or the GDP deflator, of 0-2 per cent. This is the kind of numerical objective which those Central Banks with a direct inflation target, e.g. New Zealand and Canada, are aiming to achieve. While I have great sympathy for such an approach, I want to start by arguing that the standard measures of inflation used in such targets may be incorrect, at least in principle. Such measures concentrate on current service flow prices, and ignore future service flow prices, changes in which are indicated by changing interest rates and asset prices. This thesis was cogently argued by Alchian and Klein in a paper in 1973; they put the case so well then, that I felt that I could do no better than repeat it. So, much of section 14.2 consists of selections from their earlier work. Keywords: Monetary Policy; Host Country; Central Banking; Asset Price; Price Stability (search for similar items in EconPapers) There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it. Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-0-230-37915-2_14 Ordering information: This item can be ordered from Access Statistics for this chapter More chapters in Palgrave Macmillan Books from Palgrave Macmillan |
Is your work missing from RePEc? Here is how to contribute.
Questions or problems? Check the EconPapers FAQ or send mail to .
EconPapers is hosted by the
School of Business at Örebro University.