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Monetary Policy; Questions of Adequacy, Design and Presentation
Author(s) -
Flemming John
Publication year - 1999
Publication title -
economic outlook
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.1
H-Index - 8
eISSN - 1468-0319
pISSN - 0140-489X
DOI - 10.1111/1468-0319.00207
Subject(s) - monetary policy , economics , inflation (cosmology) , asset (computer security) , presentation (obstetrics) , price of stability , monetary economics , inflation targeting , stability (learning theory) , control (management) , macroeconomics , keynesian economics , computer science , medicine , physics , computer security , machine learning , theoretical physics , radiology , management
In this article John Flemming considers three possible modifications to the presentation and design of monetary policy. He argues first that it is odd to forecast the target variable – inflation – when it is policy to do what is necessary to deliver the target. What would be interesting would be a forecast of what interest rates might prove necessary. Secondly he considers the possibility that with monetary policy dedicated to price stability and fiscal policy to paying for public expenditure – and stabilising output – a third control might be appropriate to stabilise the financial system. Finally, and overlapping with the last, he explores ways in which asset price changes might be reflected in a broader measure of inflation – as recently suggested by Charles Goodhart and the IMF.