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The central ingredient of the Yeager-Greenfield proposal is the suggestion that genuine price level stability can be brought about by the appropriate designation of a broad-based consumption bundle as the unit of account in a monetary system in which there is little or no role for government involvement.
1) Reviewing the economic events and debates of this period not only provides a better understanding of the reasons behind the Fed's monetary policy actions, but also illuminates how policy views within the System evolved toward recognizing price level stability as the principal long-run objective for monetary policy.
We would argue that this choice will enhance macroeconomic stability in the UK with the decline in uncertainty from the removal of a spectrum of exchange rate shocks being aided by an essentially mo re credible, Treaty-based, commitment to price level stability.
Without a central bank, New Zealand achieved price level stability through the Bank of England's obligation to maintain convertibility: British price level stability directly affected the stability of export earnings and, through the sterling exchange standard, the domestic price level.
We first discuss a simple description of the monetary framework in this paper, and look at the issues of price level stability and the appropriate forecasting horizon.
The Alan Greenspan Fed gets better marks for moving toward a single goal of price level stability.
Thus, the ceiling is different from monetary targeting as practiced by the Bundesbank who announced a target corridor, or more precisely a funnel, for the future money stock that would be in line with price level stability.
In the first case, the central bank is expected to bring down inflation below its medium-term price stability objective in order to achieve price level stability following a positive shock to inflation.