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Article: The Credibility of the Monetary Policy Free Lunch

TitleThe Credibility of the Monetary Policy Free Lunch
Authors
KeywordsPrice level targeting
Inflation targeting
Credibility
Free lunch
Discretion
Issue Date2005
PublisherElsevier BV. The Journal's web site is located at http://www.elsevier.com/locate/jmacro
Citation
Journal of Macroeconomics, 2005, v. 27 n. 3, p. 434-451 How to Cite?
AbstractPrice level targeting has been proposed as an alternative to inflation targeting that may confer benefits if a central bank sets policy under discretion, even if society’s loss function is specified in terms of inflation (instead of price level) volatility. This paper demonstrates the sensitivity of this argument. If even a small portion of agents use a rule-of-thumb to form inflation expectations, or does not fully understand the nature of the target, price level targeting may in fact impose costs on society rather than benefits.
Persistent Identifierhttp://hdl.handle.net/10722/48698
ISSN
2015 Impact Factor: 0.714
2015 SCImago Journal Rankings: 0.618
ISI Accession Number ID

 

DC FieldValueLanguage
dc.contributor.authorYetman, JAen_HK
dc.date.accessioned2008-05-22T04:21:48Z-
dc.date.available2008-05-22T04:21:48Z-
dc.date.issued2005en_HK
dc.identifier.citationJournal of Macroeconomics, 2005, v. 27 n. 3, p. 434-451en_HK
dc.identifier.issn0164-0704en_HK
dc.identifier.urihttp://hdl.handle.net/10722/48698-
dc.description.abstractPrice level targeting has been proposed as an alternative to inflation targeting that may confer benefits if a central bank sets policy under discretion, even if society’s loss function is specified in terms of inflation (instead of price level) volatility. This paper demonstrates the sensitivity of this argument. If even a small portion of agents use a rule-of-thumb to form inflation expectations, or does not fully understand the nature of the target, price level targeting may in fact impose costs on society rather than benefits.en_HK
dc.format.extent385729 bytes-
dc.format.extent234412 bytes-
dc.format.mimetypeapplication/pdf-
dc.format.mimetypeapplication/pdf-
dc.languageengen_HK
dc.publisherElsevier BV. The Journal's web site is located at http://www.elsevier.com/locate/jmacroen_HK
dc.rightsCreative Commons: Attribution 3.0 Hong Kong License-
dc.rightsJournal of Macroeconomics. Copyright © Elsevier BV.en_HK
dc.subjectPrice level targetingen_HK
dc.subjectInflation targetingen_HK
dc.subjectCredibilityen_HK
dc.subjectFree lunchen_HK
dc.subjectDiscretionen_HK
dc.titleThe Credibility of the Monetary Policy Free Lunchen_HK
dc.typeArticleen_HK
dc.identifier.openurlhttp://library.hku.hk:4550/resserv?sid=HKU:IR&issn=0164-0704&volume=27&issue=3&spage=434&epage=451&date=2005&atitle=The+Credibility+of+the+Monetary+Policy+Free+Lunchen_HK
dc.identifier.emailYetman, JA: jyetman@econ.hku.hken_HK
dc.description.naturepostprinten_HK
dc.identifier.doi10.1016/j.jmacro.2004.02.006en_HK
dc.identifier.scopuseid_2-s2.0-24344487231-
dc.identifier.isiWOS:000232079900003-

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