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Is It Time For Price‐Level Targeting?

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  • Steve Ambler

Abstract

This paper summarises arguments for and against a shift by central banks from inflation targeting to price‐level targeting. It concludes that the weight of the evidence favours a shift. One of the advantages of price‐level targeting is its superior macroeconomic performance when short‐term nominal interest rates are close to zero. Since this is the current situation facing many central banks, it may also be politically opportune to consider such a switch.

Suggested Citation

  • Steve Ambler, 2009. "Is It Time For Price‐Level Targeting?," Economic Affairs, Wiley Blackwell, vol. 29(3), pages 35-39, September.
    • Handle: RePEc:bla:ecaffa:v:29:y:2009:i:3:p:35-39
    DOI: 10.1111/j.1468-0270.2009.01916.x
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    References listed on IDEAS

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