Lessons for monetary policy: what should the consensus be?

This paper outlines important lessons for monetary policy. In particular, the role of inflation targeting, which was much acclaimed prior to the financial crisis and since then has not lost much of its endorsement, is cr
This paper outlines important lessons for monetary policy. In particular, the role of inflation targeting, which was much acclaimed prior to the financial crisis and since then has not lost much of its endorsement, is critically reviewed. Ignoring the relation between monetary policy and asset prices, as is the case in this monetary policy approach, can lead to financial instability. In contrast, giving, inter alia, monetary factors a role in central banks’ policy decisions, as is done in the ECB’s encompassing approach, helps prevent these potentially harmful side effects and thus allows for fostering financial stability. Finally, this paper makes a case against increasing the central banks’ inflation target. JEL Classification: E44, E52, E58 Keywords: Inflation Targeting, Asset Prices, Financial Stability, ECB
show moreshow less

Download full text files

Export metadata

  • Export Bibtex
  • Export RIS

Additional Services

    Share in Twitter Search Google Scholar
Metadaten
Author:Otmar Issing
URN:urn:nbn:de:hebis:30-90426
Series (Serial Number):CFS working paper series (2011, 13)
Document Type:Working Paper
Language:English
Date of Publication (online):2011/06/16
Year of first Publication:2011
Publishing Institution:Univ.-Bibliothek Frankfurt am Main
Release Date:2011/06/16
Tag:Asset Prices ; ECB; Financial Stability ; Inflation Targeting
HeBIS PPN:267004729
Institutes:Center for Financial Studies (CFS)
Dewey Decimal Classification:330 Wirtschaft
Licence (German):License Logo Veröffentlichungsvertrag für Publikationen

$Rev: 11761 $