“A Stable Price Level Standard for Federal Reserve Monetary Policy”
“In a recent article in the Cato Journal dealing with the transparency of Federal Reserve monetary policy, Federal Open Market Committee (FOMC) Chairman Ben Bernanke provided an authoritative account of current Federal Reserve strategy (Cato Journal, vol. 28, No. 2, Spring/Summer, 2008, “The Fed’s Road Toward Greater Transparency,” pp. 175-186). Bernanke notes that “inflation-targeting” does not imply a single-minded focus on inflation, but includes a “dual mandate” that also takes “account of other economic goals besides price stability–notably economic growth, employment, and financial stability–when making policy decisions” (183). Central banks, Bernanke states, agree that “maintaining low and stable inflation” is the best means to maximize economic welfare.” Read more.
