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Price Stability and Intermediate Targets for Monetary Policy

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  • Vítor Gaspar

Abstract

Monetary policy strategy in Portugal has been presented in recent years as pursuing the final goal of price stability through an exchange rate stability target. This paper argues that a central bank committed to the goal of price stability - meaning low inflation in the medium/long run - can successfully control average inflation in the economy drawing up a strategy that involves an intermediate monetary target (exchange rate or money). Arguments in favour of the use of an intermediate monetary target in terms of communication strategy are briefly discussed.

Suggested Citation

  • Vítor Gaspar, 1999. "Price Stability and Intermediate Targets for Monetary Policy," Working Papers w199901, Banco de Portugal, Economics and Research Department.
    • Handle: RePEc:ptu:wpaper:w199901
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    File URL: https://www.bportugal.pt/sites/default/files/anexos/papers/wp199901.pdf
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    1. von Hagen, J, 1995. "Inflation and Monetary Targeting in Germany," Papers 03, American Institute for Contemporary German Studies-.
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    Cited by:

    1. António Duarte, 2009. "The Portuguese Disinflation Process: Analysis of Some Costs and Benefits," Transition Studies Review, Springer;Central Eastern European University Network (CEEUN), vol. 16(1), pages 157-173, May.
    2. Pedro Bação & António Portugal Duarte, 2011. "Accession to the European Union, Interest Rates and Indebtedness: Greece and Portugal," Book Chapters, in: Mirjana Radovic Markovic & Srdjan Redzepagic & João Sousa Andrade & Paulino Teixeira (ed.), Serbia and the European Union: Economic Lessons from the New Member States, edition 1, volume 1, chapter 4, pages 61-76, Institute of Economic Sciences.

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