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On Making Monetary Policy More Effective Domestically and Internationally

Author

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  • Allan H. Meltzer

    (University Professor of Political Economy and Public Policy, Carnegie Mellon University, Visiting Scholar, American Enterprise Institute, and Honorary Adviser, Institute for Monetary and Economic Studies, Bank of Japan)

Abstract

Increased interest in price stability as the principal goal of monetary policy raises an issue about how well central banks can meet that goal.One approach is to forecast inflation a year or more ahead.Inability to separate permanent inflation from transitory,one-time changes in price levels suggests that forecast errors cannot be held within the 2% range frequently used.The paper again suggests an adaptive rule for money growth.If adopted for the principal currencies,the proposed rule would increase welfare for participants.Countries that have the best records of inflation control have often followed a rule of this kind.

Suggested Citation

  • Allan H. Meltzer, 1996. "On Making Monetary Policy More Effective Domestically and Internationally," Monetary and Economic Studies, Institute for Monetary and Economic Studies, Bank of Japan, vol. 14(1), pages 1-27, July.
    • Handle: RePEc:ime:imemes:v:14:y:1996:i:1:p:1-27
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    Citations

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    Cited by:

    1. Fujiki, Hiroshi & Otani, Akira, 2002. "Do Currency Regimes Matter in the 21st Century? An Overview," Monetary and Economic Studies, Institute for Monetary and Economic Studies, Bank of Japan, vol. 20(S1), pages 47-79, December.
    2. Eugenio Domingo Solans, 2000. "How should monetary policymakers respond to the new challenges of global economic integration? : commentary," Proceedings - Economic Policy Symposium - Jackson Hole, Federal Reserve Bank of Kansas City, pages 277-287.
    3. Sharon Kozicki, 1999. "How useful are Taylor rules for monetary policy?," Economic Review, Federal Reserve Bank of Kansas City, vol. 84(Q II), pages 5-33.
    4. Yalcin Karatepe & Elif Karaaslan & Fazil Gokgoz, 2002. "Conditional CAPM and an Application on the ISE," Istanbul Stock Exchange Review, Research and Business Development Department, Borsa Istanbul, vol. 6(21), pages 21-36.
    5. Alpaslan Akcoraoglu & Funda Yurdakul, 2002. "Global Factors and Stock Returns: Empirical Evidence From the Istanbul Stock Exchange," Istanbul Stock Exchange Review, Research and Business Development Department, Borsa Istanbul, vol. 6(21), pages 1-20.
    6. Cem Mehmet Baydur & Bora Suslu, 2002. "Anchors in Implementation of Moneraty Policies in Turkey in 1990’s," Istanbul Stock Exchange Review, Research and Business Development Department, Borsa Istanbul, vol. 6(21), pages 37-86.

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