NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

On Consequences and Criticisms of Monetary Targeting

Bennett T. McCallum

NBER Working Paper No. 1596 (Also Reprint No. r0683)
Issued in April 1985
NBER Program(s):   ME

The purpose of this paper is to review and evaluate the most important existing criticisms of policy strategies that feature adherence to money stock targets. Four main categories of criticism (and counterargumerits) are analyzed. The first of these involves the claim that accurate money stock control is infeasible while the second contends that such control can only be obtained along with extreme volatility of interest rates. The third emphasizes difficulties resulting from technical change and deregulation, and the fourth concerns strategic issues of rules vs. discretion, activist vs. non-activist policy, and the logical function of intermediate targets.

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Document Object Identifier (DOI): 10.3386/w1596

Published: McCallum, Bennett T. "On Consequences and Criticisms of Monetary Targeting," Journal of Money, Credit and Banking, Vol. 17, No. 4, Part 2, Nov. 1985,pp. 570-597. citation courtesy of

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