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A Price Objective for Monetary Policy


The idea of monetary policy aimed at producing a stable price level has gained increasing support in the United States in recent years. In 1991, the Neal Resolution proposed to make such a policy objective law. Elsewhere, the notion of price stability has also become more popular. For example, the central banks of Canada and New Zealand recently adopted explicit multiyear targets for inflation, and a commitment to price stability is widely thought to be a necessary condition for successful monetary union in the European Community.

The idea of monetary policy aimed at producing a stable price level has gained increasing support in the United States in recent years. In 1991, the Neal Resolution proposed to make such a policy objective law. Elsewhere, the notion of price stability has also become more popular. For example, the central banks of Canada and New Zealand recently adopted explicit multiyear targets for inflation, and a commitment to price stability is widely thought to be a necessary condition for successful monetary union in the European Community.


Suggested citation: Gavin, William T., and Alan C. Stockman, 1992. "A Price Objective for Monetary Policy," Federal Reserve Bank of Cleveland, Economic Commentary, 04.01.1992.

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