Monetary Policy; Questions of Adequacy, Design and Presentation |
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Authors: | John Flemming |
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Institution: | Wadham College, Oxford |
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Abstract: | 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. |
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