Some Thoughts on Monetary Targeting vs. Inflation Targeting

Karen Cabos (), Michael Funke and Nikolaus A Siegfried

Quantitative Macroeconomics Working Papers from Hamburg University, Department of Economics

Abstract: We offer some empirical evidence on the likely scale of control and indicator problems surrounding alternative monetary targets and a direct inflation target. The links between monetary policy actions and inflationare estimated in dynamic linear models using the Kalman filter. We compare alternative intermediate-target and final-target monetary strategies using German data from the end of the Bretton-Woods system until 1997. The estimation results show that broad money dominates narrow money as an intermediate target, while control problems involved in targeting broad money are larger than for direct inflation targets.

Keywords: Monetary Policy; Time-Varying Parameter Models; Inflation Targeting (search for similar items in EconPapers)
JEL-codes: C22 C53 E52 (search for similar items in EconPapers)
Pages: 21 pages
Date: 1999-10-28
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Citations: View citations in EconPapers (1)

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Related works:
Journal Article: Some Thoughts on Monetary Targeting vs. Inflation Targeting (2001)
Journal Article: Some Thoughts on Monetary Targeting vs. Inflation Targeting (2001)
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