Academic journal article Review - Federal Reserve Bank of St. Louis

FOMC Discussion of Inflation Targets

Academic journal article Review - Federal Reserve Bank of St. Louis

FOMC Discussion of Inflation Targets

Article excerpt

Setting Specific Inflation Targets

"The Committee also considered the potential advantages and disadvantages of setting specific targets for bringing inflation down and achieving price stability over time. Such targets might provide an alternative or supplemental approach to the monetary growth ranges, which had been found to be unreliable guides for monetary policy over the past several years. The members discussed a number of aspects of inflation targeting. On the one hand, such targeting would help to anchor the conduct of monetary policy and progress in meeting these objectives could enhance the credibility of the Federal Reserve and perhaps reduce the overall cost of attaining price stability. On the other hand, close adherence to preset inflation targets could unduly constrain the Federal Reserve in its efforts to counteract the effects of cyclical shortfalls in the performance of the economy"

Minutes of the FOMC Meeting, January 31-February 1, 1995, p. 18.

The Goal of Price Stability

"At this meeting, the Committee discussed a bill, titled the "Economic Growth and Price Stability Act of 1995," that recently had been introduced in the United States Senate. The bill would make price stability the primary long-run policy goal of the Federal Reserve and require the Federal Reserve to establish a numerical definition of price stability and to implement a policy that would effectively promote such stability over time. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.