A Framework for the Pursuit of Price Stability

[...]In my view, a goal of price stability requires thatmonetary policy be oriented beyond the horizon of itsimmediate impact on inflation and the economy. Thisimmediate horizon is on the order of two to three years.This orientation properly puts the focus of a forwardlookingpolicy on the time horizon over which monetarypolicy moves today will have their effect and householdsand businesses will do most of their planning. This is thehorizon that is relevant for the definition of price stabilityarticulated by Chairman Greenspan: that price stabilityexists when inflation is not a consideration in householdand business decisions.[...]