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Related to Price stability: economic growth, full employment
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As the Federal Reserve was founded in the environment of the gold standard, which was thought to safeguard price stability over time, it could be argued that in 1913 it was not necessary to explicitly state that price stability should be the mandate of the institution.
At the same time as it offered its "understanding," the Bank emphasized--as it had done in 2000--that under normal circumstances, it regarded zero inflation as the definition of price stability in Japan.
Communication has come to play an increasingly important and substantive role in the Fed's conduct of monetary policy because open and effective communication is a crucial ingredient in building and maintaining credibility for price stability.
To support and safeguard the pursuit of price stability, the Treaty endowed the ECB with a high degree of institutional independence, and in order to ensure transparency and accountability, it imposed on the ECB extensive reporting requirements.
All of these benefits of price stability suggest that low and stable inflation can increase the level of resources productively employed in the economy, and might even help increase the rate of economic growth.
Until reversed, this development will put upward pressure on import prices and will continue to affect the risks to price stability in the euro area.
It reflects the overwhelming view that the best contribution the single monetary policy can make to raising the standard of living in the euro area is to maintain price stability in a credible and lasting manner.
However, Louis Dreyfus president Tim Stuart says compounders of specialized products (such as for automotive) are interested in hedging a portion of their business so they can pass on price stability to customers.
Recognizing that no one country's central bank has a monopoly on the right answers, I would like to share with you my views on why I believe price stability is so important and what approaches can be taken to achieve this goal.
Hence, if Greenspan does succeed in reducing inflation to zero, it will not be the result of his personal magnetism, but simply a sign that the current inflationary cycle has run its course, and inevitably a happy age of price stability is to follow.
But inevitably "stuff happens" and there is the possibility that a shock could cause us to lose price stability.
Jordan said the initiative, would make it harder for the bank to intervene during crises and fulfil its mandate of price stability.