Achieving price stability: a summary of the Bank's 1996 symposium

Central banks throughout the world are moving to adopt long-run price stability as their primary goal. Whether operating with multiple short-run goals or legislative mandates for price stability, virtually all central banks have recognized the desirability of achieving price stability over time. Countries with moderate to high inflation are adopting policies to reduce inflation, and countries with low inflation are adopting policies to achieve and maintain price stability.> To better understand how central banks can best reduce inflation and what policies and operating procedures should be implemented to maintain price stability, the Federal Reserve Bank of Kansas City sponsored a symposium entitled Achieving Price Stability, held at Jackson Hole, Wyoming, on August 29-31, 1996. The symposium brought together a distinguished group of central bankers, academics, and financial market representatives.> Kahn summarizes the papers and commentary presented at the symposium. Participants agreed that low or zero inflation is the appropriate long-run goal for monetary policy. They disagreed, however, about whether a little inflation should be tolerated and what strategies should be adopted to achieve and maintain price stability.