On Consequences and Criticisms of Monetary Targeting

56 Pages Posted: 19 Jun 2004

See all articles by Bennett T. McCallum

Bennett T. McCallum

Carnegie Mellon University - David A. Tepper School of Business; National Bureau of Economic Research (NBER)

Date Written: April 1985

Abstract

The purpose of this paper is to review and evaluate the most important existing criticisms of policy strategies that feature adherence to money stock targets. Four main categories of criticism (and counterargumerits) are analyzed. The first of these involves the claim that accurate money stock control is infeasible while the second contends that such control can only be obtained along with extreme volatility of interest rates. The third emphasizes difficulties resulting from technical change and deregulation, and the fourth concerns strategic issues of rules vs. discretion, activist vs. non-activist policy, and the logical function of intermediate targets.

Suggested Citation

McCallum, Bennett T., On Consequences and Criticisms of Monetary Targeting (April 1985). NBER Working Paper No. w1596, Available at SSRN: https://ssrn.com/abstract=336332

Bennett T. McCallum (Contact Author)

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