Economics, Econometrics and Finance
4 years ago

Price Level Targeting Best for Stabilizing Economy, Study Finds.

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Carleton Economic Papers
Macroeconomic Stabilisation: Fixed Exchange Rates vs Inflation Targeting vs Price Level Targeting
Vivek H. Dehejia, Nicholas Rowe

Paper Summary

The article compares fixed exchange rates, inflation targeting, and price level targeting as monetary policies. Price level targeting is found to be the best for stabilizing output, real exchange rate, and real interest rate.

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