stability and instrument independence to achieve it. Advances in academic research supported a strong focus on price stability … "promote maximum employment in a context of price stability." Although the Fed has established credibility for the long …

This paper studies the trade-offs that can arise between inflation targeting and financial stability objectives. We use … policy pursues traditional price stability objectives; (2) monetary policy leaning against the wind; and (3) a case of policy … stability objectives as an additional macroeconomic policy increases the volatility of inflation. We identify cases in which the …

reduces the return to innovation, thus reducing total factor productivity growth and generating a permanent loss in output …. Using a purely quadratic approximation to welfare under endogenous growth, we derive normative implications for monetary …

approximate price stability rule. In addition to a standard first-order approximation to the equilibrium solution, this paper also …

The global financial crisis of late 2008 could not have provided more convincing evidence that price stability is not a … sufficient condition for financial stability. In order to attain both, central banks must develop macroprudential instruments in …