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Nominal Income Targeting in an Open-Economy Optimizing Model

McCallum, Bennett T.; Nelson, Edward - 2021

This paper presents stochastic simulation results pertaining to the performance of nominal income targeting, here … existing studies of nominal income growth from a specified target rate. It attempts to improve on existing studies by … conducting analysis in a macroeconomic model that is designed to respect both neoclassical theory and empirical regularities …

Persistent link: https://www.econbiz.de/10013236691

Targeting Nominal Income : a Note

West, Kenneth D. - 2021

This paper compares nominal income and monetary targets in a standard aggregate demand - aggregate supply framework. If … the desirability of policies is measured by their effect on the unconditional variance of output, nominal income targeting … the opposite of the condition that in Bean (1984) is sufficient to make nominal income targeting preferable.This points …

Persistent link: https://www.econbiz.de/10013220426

How Should Monetary Policy Be Conducted in an Era of Price Stability?

Svensson, Lars E. O. - 2021

The paper discusses several issues related to how monetary policy should be conducted in an era of price stability. Low inflation (with base drift in the price level) and price-level stability (without such base drift) are compared, and a suitable loss function (corresponding to flexible...

Persistent link: https://www.econbiz.de/10013219290

Targeting vs. Instrument Rules for Monetary Policy

McCallum, Bennett T.; Nelson, Edward - 2021

Svensson (JEL, 2003) argues strongly that specific targeting rules first order optimality conditions for a specific objective function and model are normatively superior to instrument rules for the conduct of monetary policy. That argument is based largely upon four main objections to the latter...

Persistent link: https://www.econbiz.de/10013221112

Targeting Rules vs. Instrument Rules for Monetary Policy : What is Wrong with Mccallum and Nelson?

Svensson, Lars E. O. - 2021

structural consumption Euler conditions in the theory of consumption. They express the very robust condition of equality of the …

Persistent link: https://www.econbiz.de/10013228035

Targeting Rules for Monetary Policy

Aizenman, Joshua; Frenkel, Jacob A. - 2021

This paper develops an analytical framework for the analysis of targeting rules for monetary policy. We derive the optimal money supply rule and analyze the implications of other monetary rules including rules that target nominal GNP, the price level, the monetary growth rate and the...

Persistent link: https://www.econbiz.de/10013215376

The Elusive Welfare Economics of Price Stability as a Monetary Policy Objective : Should New Keynesian Central Bankers Pursue Price Stability?

Buiter, Willem H. - 2021

The paper studies the inflation rate associated with optimal monetary policy in a standard suite of DSGE models, when fiscal policy is either unrestricted optimal or restricted but supportive of monetary policy. Full nominal price flexibility, nominal prices set one period in advance and...

Persistent link: https://www.econbiz.de/10013215380

Forecast Targeting as a Monetary Policy Strategy : Policy Rules in Practice

Woodford, Michael - 2010

Forecast targeting is an innovation in central banking that represents an important step toward more rule-based policymaking, even if it is not an attempt to follow a policy rule of any of the types that have received primary attention in the theoretical literature on optimal monetary policy....

Persistent link: https://www.econbiz.de/10012759644

Issues in the Design of Monetary Policy Rules

McCallum, Bennett T. - 2021

simulation procedures; interactions between monetary and fiscal policies; and the fiscal theory of the price level …

Persistent link: https://www.econbiz.de/10013311870

Inflation Targeting in a St. Louis Model of the 21st Century

King, Robert G.; Wolman, Alexander L. - 2021

Inflation targeting is a monetary policy rule that has implications for both the average performance of an economy and its business cycle behavior. We use a modern, rational expectations model to study the twin effects of this policy rule. The model highlights forward- looking consumption and...

Persistent link: https://www.econbiz.de/10013218907