Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/314053 
Authors: 
Year of Publication: 
2019
Citation: 
[Journal:] Journal of Applied Economics [ISSN:] 1667-6726 [Volume:] 22 [Issue:] 1 [Year:] 2019 [Pages:] 103-116
Publisher: 
Taylor & Francis, Abingdon
Abstract: 
This talk emphasizes the connection between inflation targeting and monetary policy rules. Inflation targeting is not enough. You need to have a policy procedure - a policy rule - to achieve the target. And one cannot design or evaluate a monetary policy rule without a target inflation rate. Hence, there is a symbiotic relationship between inflation targeting and monetary policy rules. Initially, the instrument in the policy rule was a monetary aggregate - a quantity, usually the money supply. It was only later that research on monetary policy rules focused on another instrument of monetary policy - the interest rate, as velocity became more volatile so the interest rate was more reliable as instrument, at least for low levels of inflation. Interest rate rules work best within a band between very high inflation and deflation. Outside that band, the central bank should rely more on money growth rules.
Subjects: 
Inflation targeting
interest rate rules
monetary policy instruments
monetary policy rules
money growth rules
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article

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