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Eurosystem Monetary Targeting: Lessons from U.S. Data
[report]
1999
unpublished
Preserved Fulltext
Using a small empirical model of in ‡ation, output, and money estimated on U.S. data, we compare the relative performance of monetary targeting and in ‡ation targeting. The results show that monetary targeting would be quite ine¢cient, with both higher in ‡ation and output variability. This is true even with a nonstochastic money demand formulation. Our results are also robust to using a P* model of in ‡ation. Therefore, in these popular frameworks, there is no support for the prominent role
doi:10.3386/w7179
fatcat:c4s46gbhpfbs7ifimgs7rbwqp4