Achieving Price Stability in the Euro Zone: Monetary or Inflation Targeting?
De Nederlandsche Bank DNB Staff Report No. 043
34 Pages Posted: 29 May 2011
Date Written: February 22, 2000
Abstract
In this paper a small econometric model with model-consistent expectations is adopted for the euro zone to study monetary and inflation targeting. Simulation results show that the 'costs' in terms of inflation and economic growth volatility are by and large lowest in case of inflation targeting. Some attention is finally drawn to asymmetric shocks.
Keywords: Monetary targeting, inflation targeting, euro zone
JEL Classification: C32, E40, E52
Suggested Citation: Suggested Citation
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