Economists generally assert that countries sacrifice monetary independence when they peg their exchange rates. At the same time, central bankers frequently assert that pegging an exchange rate does not eliminate the independence of monetary policy. This paper examines the effects of money-supply...

An analysis of how a rule for monetary policy specifying a stable price level may dominate a rule for zero inflation with price-level drift, even in the case where, for purely economic reasons, an inflation rule is preferred.

An argument that the Federal Reserve, by targeting a long-run path for the price level, could achieve its price-stability objective without inhibiting its short-term goals.