Chapter 16 The Conduct Of Monetary Policy: Strategy & Tactics

Tactics: The Taylor Rule

Lessons for Monetary Policy Strategy from the Global Financial Crisis

The Price Stability Goal and the Nominal Anchor

The Federal Reserve’s Monetary Policy Strategy

Tactics: Choosing the Policy Instrument

Advantages of the Fed’s “Just Do It” Approach

Disadvantages of the Fed’s “Just Do It” Approach.

Implications for Inflation Targeting

How Should Central Banks Respond to Asset-Price Bubbles?

Criteria for Choosing the Policy Instrumen

The Role of a Nominal Anchor

The Time-Inconsistency Problem

Inflation Targeting

Should Price Stability be the Primary Goal of Monetary Policy?

Other Goals of Monetary Policy

Economic Growth

Stability of Financial Markets

Interest-Rate Stability

High Employment and Output Stability

Stability in Foreign Exchange Markets

Hierarchical Versus Dual Mandates.

Price Stability as the Primary, Long-Run Goal of Monetary Policy

Advantages of Inflation Targeting

Advantages of Inflation Targeting

Inflation Targeting in New Zealand, Canada, and the United Kingdom