Seminar Papers, Institute for International Economic Studies, Stockholm University
Eurosystem Monetary Targeting: Lessons from U.S. Data
() and Lars Svensson
Abstract: Using a small empirical model of inflation, output, and
money estimated on U.S: data, we compare the relative performance of
monetary targeting and inflation targeting. The results show that monetary
targeting would be quite inefficient, with both higher inflation and output
variability. This is true even with a deterministic money demand
formulation. In this framework, there is thus no support for the prominent
role given to money growth in the Eurosystem's monetary policy strategy.
Keywords: inflation targeting; monetary targeting; ECB; (follow links to similar papers)
JEL-Codes: E42; E52; E58; (follow links to similar papers)
35 pages, June 1, 1999
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