In the wake of the international financial crisis nominal income targeting has received renewed attention from a number of leading macroeconomists as alternative to inflation targeting. The case for nominal income targeting has been built on both positive and negative arguments. The negative...

The Great Moderation is often characterized by the decline in the variability of output and inflation from earlier periods. While a multitude of explanations for the Great Moderation exist, notable research has focused on the role of monetary policy. Specifically, early evidence suggested that...

A framework is developed in which inflation biases with different target variables are compared. A nominal growth target measured in consumer prices may yield less stabilization bias than a nominal income growth target. Exchange rate and inflation targets result in less stabilization bias than...