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Monetary Policy Issues for the Eurosystem (1999)
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BibTeX
@MISC{Svensson99monetarypolicy,
author = {Lars E. O. Svensson},
title = {Monetary Policy Issues for the Eurosystem},
year = {1999}
}
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Abstract
The paper discusses the choice between ination targeting and monetary targeting as a strategy for the Eurosystem, the actual strategy the Eurosystem announced in the fall of 1998, the framework for policy decisions appropriate for achieving the the goals of the Eurosystem, the role of exchange rate management in the EMU, and the accountability and transparency of the Eurosystem. The choice between inflation targeting and monetary targeting is, in effect, a choice between high and low transparency. Inflation targeting and monetary targeting, in practice, imply similar policy decisions, but monetary targeting implies that policy decisions are explained in terms of money-growth developments that are not essential for policy. The Eurosystem has specified an operational inflation target, although in a somewhat ambigious way. More importantly, its announced monetary strategy is deficient, since it proposes a prominent role for an essentially irrelevant money-growth indicator in analysis and communicatio...
Keyphrases
monetary policy issue monetary targeting policy decision similar policy decision irrelevant money-growth indicator low transparency money-growth development exchange rate management monetary targeting implies prominent role actual strategy announced monetary strategy operational inflation target ambigious way
