Research Discussion Papers, Bank of Finland
No 30/2012:
Careful price level targeting
George A. Waters ()
Abstract: This paper examines a class of interest rate rules that
respond to public expectations and to lagged variables. Varying levels of
commitment correspond to varying degrees of response to lagged output and
targeting of the price level. If the response rises (unintentionally) above
the optimal level, the outcome deteriorates severely. Hence, the optimal
level of commitment is sensitive to the method of expectations formation
and partial commitment is the robust, optimal policy.
Keywords: learning; monetary policy; interest rate rules; commitment; price level targeting; (follow links to similar papers)
JEL-Codes: D84; E31; E52; (follow links to similar papers)
11 pages, October 26, 2012
Before downloading any of the electronic versions below
you should read our statement on
copyright.
Download GhostScript
for viewing Postscript files and the
Acrobat Reader for viewing and printing pdf files.
Full text versions of the paper:
BoF_DP_1230.pdf 
(zipped)
Download Statistics
Questions (including download problems) about the papers in this series should be directed to Minna Nyman ()
Report other problems with accessing this service to Sune Karlsson ()
or Helena Lundin ().
Programing by
Design by Joachim Ekebom
