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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.

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.


Suggested citation: Gomme, Paul, 2001. "On the Cost of Inflation," Federal Reserve Bank of Cleveland, Economic Commentary, 05.15.2001.

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