Eurosystem Monetary Targeting: Lessons from U.S. Data / Glenn D. Rudebusch, Lars E.O. Svensson.

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Rudebusch, Glenn D

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TextSeries: Working Paper Series (National Bureau of Economic Research) ; no. w7179.Publication details: Cambridge, Mass. National Bureau of Economic Research 1999.Description: 1 online resource: illustrations (black and white)Subject(s):

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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.

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Working Paper	Biblioteca Digital	Colección NBER	nber w7179 (Browse shelf(Opens below))	Not For Loan

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Previous	nber w7176 The Anatomy of Health Insurance /	nber w7177 Monetary Policy Issues for the Eurosystem /	nber w7178 Does the P* Model Provide Any Rationale for Monetary Targeting? /	nber w7179 Eurosystem Monetary Targeting: Lessons from U.S. Data /	nber w7180 The Stock Market and Capital Accumulation /	nber w7181 Reorganization /	nber w7182 Trends in Self-Employment Among White and Black Men: 1910-1990 /	Next

June 1999.

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.