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The A W Phillips memorial lecture to the New Zealand Association of Economists: Monetary Policy – should it move onto a price level target?

Author

Listed:
  • Patrick Minford

    (Cardiff University)

Abstract

We examine whether inflation targeting should be regarded as optimal. Targeting inflation implies (undesirably) that price level variance tends to infinity: we produce some evidence from both a representative agent model and a long-used forecasting model that, once an endogenous indexation response is allowed for, price level targeting imposes no extra costs of macro variability, indeed gives significant gains.

Suggested Citation

  • Patrick Minford, 2004. "The A W Phillips memorial lecture to the New Zealand Association of Economists: Monetary Policy – should it move onto a price level target?," Macroeconomics 0409020, University Library of Munich, Germany.
    • Handle: RePEc:wpa:wuwpma:0409020
    Note: Type of Document - pdf; pages: 20
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    File URL: https://econwpa.ub.uni-muenchen.de/econ-wp/mac/papers/0409/0409020.pdf
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    Cited by:

    1. Julian A. Parra-Polania & Luisa F. Acuña-Roa, 2013. "Price-Level Targeting: an omelette that requires breaking some Inflation-Targeting eggs?," Borradores de Economia 10984, Banco de la Republica.
    2. Steve Ambler, 2009. "Price‐Level Targeting And Stabilisation Policy: A Survey," Journal of Economic Surveys, Wiley Blackwell, vol. 23(5), pages 974-997, December.
    3. Hatcher, Michael C., 2011. "Comparing inflation and price-level targeting: A comprehensive review of the literature," Cardiff Economics Working Papers E2011/22, Cardiff University, Cardiff Business School, Economics Section.
    4. Steve Ambler, 2009. "Is It Time For Price‐Level Targeting?," Economic Affairs, Wiley Blackwell, vol. 29(3), pages 35-39, September.

    More about this item

    Keywords

    montary policy targeting;

    JEL classification:

    • E - Macroeconomics and Monetary Economics

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