Pillars of Globalization: A History of Monetary Policy Targets, 1797-1997

52 Pages Posted: 22 May 2008

See all articles by Marc Flandreau

Marc Flandreau

Fondation Nationale des Sciences Politiques - Institut d'Etudes Politiques de Paris; Centre for Economic Policy Research (CEPR)

Date Written: April 2007

Abstract

This paper studies the evolution of monetary policy targets over the course of the past 200 years. We argue that policy targets are set as part of an assignment procedure that is intended to address both time consistency and monitoring problems. As a result, central banks, after having been assigned to target the exchange rate in the 19th century, are now entrusted with targeting the rate of inflation. Critical advances in the measurement of inflation have proved decisive in bringing about this radical transformation.

Keywords: central banks, exchange rates, inflation, monetary policy targets

JEL Classification: B01, E1, E3, E5

Suggested Citation

Flandreau, Marc, Pillars of Globalization: A History of Monetary Policy Targets, 1797-1997 (April 2007). CEPR Discussion Paper No. DP6252, Available at SSRN: https://ssrn.com/abstract=1135490

Marc Flandreau (Contact Author)

Fondation Nationale des Sciences Politiques - Institut d'Etudes Politiques de Paris ( email )

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Paris Cedex 07, 75337
France
+33 1 4046 7265 (Phone)
+33 1 4407 0750 (Fax)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

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