Price level targeting has been proposed as an alternative to inflation targeting that may confer benefits if a central bank sets policy under discretion, even if societyu0092s loss function is specified in terms of inflation (instead of price level) volatility. This paper demonstrates the...

This study analyzes international monetary policy cooperation in a twocountry dynamic general equilibrium model with nominal rigidities, monopolistic competition and producer currency pricing. A quadratic approximation to the utility of the consumers is derived and assumed as the policy...

The presence of a lower bound of zero on nominal interest rates has important implications for the conduct of optimal monetary policy. Standard rational expectations models can have alternative steady states as well as non-unique laws of motion, i.e. there can be possible sunspot equilibria....

This paper compares the performance of economies with different monetary regimes during the last quarter century. The conclusions include: (1) There is little evidence that inflation targeting affects performance in advanced economies, but some evidence of benefits in emerging economies; (2)...

Central banks define a monetary policy strategy in which they set out the instruments they use to achieve their monetary policy objectives as well as the incoming data they take into account when using these instruments. Independent central banks in particular are expected to provide a detailed...