Abstract
Abstract In this comment, we answer the question posed in Svensson's (2000) paper `Does the P* Model Provide any Rationale for Monetary Targeting?' - in contrast to him - in the affirmative. We argue that a strategy of monetary targeting can be rationalized within the P* framework. Furthermore, we demonstrate that money growth targeting is a special form of inflation forecast targeting based on a `limited' information set. In contrast to `full information' inflation forecast targeting, monetary growth targeting is likely to be more robust under changing conditions of the real world.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Disclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.