Canzoneri, M. B., Nolan, C. and Yates, T. (1997) Mechanisms for achieving monetary stability: inflation targeting versus the ERM. Journal of Money, Credit and Banking, 29(1), pp. 46-60. (doi: 10.2307/2953685)
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Publisher's URL: http://dx.doi.org/10.2307/2953685
Abstract
First we modify the Barro-Gordon model so that a credibility-stabilization trade-off will remain even when a performance contract of the type envisaged by Walsh (1995) is imposed on the central bank governor. We do this by modeling a real interest rate bias along with the inflation bias. Then we discuss how various inflation penalties might actually be imposed on a central bank and ask whether "inflation targeting (supported by one or another of the penalties) is likely to bring a better resolution to the credibility-stabilization trade-off than the ERM.
| Item Type: | Articles |
|---|---|
| Status: | Published |
| Refereed: | Yes |
| Glasgow Author(s) Enlighten ID: | Nolan, Professor Charles |
| Authors: | Canzoneri, M. B., Nolan, C., and Yates, T. |
| College/School: | College of Social Sciences > Adam Smith Business School > Economics |
| Journal Name: | Journal of Money, Credit and Banking |
| Publisher: | Wiley |
| ISSN: | 0022-2879 |
| ISSN (Online): | 1538-4616 |
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