NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Issues Concerning Nominal Anchors for Monetary Policy

Robert Flood, Michael Mussa

NBER Working Paper No. 4850
Issued in September 1994
NBER Program(s):   IFM   ME

This paper presents a selective survey of issues relevant to the choice of nominal anchors for monetary policy. Section I reviews long price-level histories for the United Kingdom and United States, which reveal that the price level behaved very differently following WWII in these countries than it had done in previous post-war experiences. In particular following WWII the responsibilities of monetary policy expanded to encompass a business-cycle stabilization role and the nominal anchor shifted from the fixed anchor or price-level stability to the moving anchor of inflation-rate stability. The remaining sections of the paper review, in the context of a variety of models, some of the considerations that are relevant to setting the average inflation rate in countries without a fixed nominal anchor.

download in pdf format
   (392 K)

email paper

This paper is available as PDF (392 K) or via email.

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w4850

Published: Balino, Thomas J. and Carlo Cottarelli (eds.) Frameworks for Monetary Stability: Policy Issues and Country Experiences. International Monetary Fund, 1994.

Users who downloaded this paper also downloaded these:
Bruno w3518 High Inflation and the Nominal Anchors of an Open Economy
Edwards w4246 Exchange Rates as Nominal Anchors
Krueger w5968 Nominal Anchor Exchange Rate Policies as a Domestic Distortion
Mishkin w6965 International Experiences with Different Monetary Policy Regimes
Frankel w16362 A Comparison of Monetary Anchor Options, Including Product Price Targeting, for Commodity-Exporters in Latin America
 
Publications
Activities
Meetings
NBER Videos
Data
People
About

Support
National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us