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Economic Commentary

On the Cost of Inflation

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The FOMC has two objectives: maximizing sustainable economic growth, and maintaining price stability. At times—like the past year—these goals appear to be in conflict. This Economic Commentary outlines some economic theory that suggests that in the long run the FOMC can achieve its two objectives by focusing primarily on its price stability target.

05.15.2001EC 5/15/2001

The views authors express in Economic Commentary are theirs and not necessarily those of the Federal Reserve Bank of Cleveland or the Board of Governors of the Federal Reserve System. The series editor is Tasia Hane. This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License. This paper and its data are subject to revision; please visit clevelandfed.org for updates.

Suggested Citation

Gomme, Paul. 2001. “On the Cost of Inflation.” Federal Reserve Bank of Cleveland, Economic Commentary 5/15/2001.

This work by Federal Reserve Bank of Cleveland is licensed under Creative Commons Attribution-NonCommercial 4.0 International