Achieving Price Stability in the Euro Zone: Monetary or Inflation Targeting?

De Nederlandsche Bank DNB Staff Report No. 043

34 Pages Posted: 29 May 2011

Date Written: February 22, 2000

Abstract

In this paper a small econometric model with model-consistent expectations is adopted for the euro zone to study monetary and inflation targeting. Simulation results show that the 'costs' in terms of inflation and economic growth volatility are by and large lowest in case of inflation targeting. Some attention is finally drawn to asymmetric shocks.

Keywords: Monetary targeting, inflation targeting, euro zone

JEL Classification: C32, E40, E52

Suggested Citation

Peeters, Marga, Achieving Price Stability in the Euro Zone: Monetary or Inflation Targeting? (February 22, 2000). De Nederlandsche Bank DNB Staff Report No. 043, Available at SSRN: https://ssrn.com/abstract=1854903 or http://dx.doi.org/10.2139/ssrn.1854903

Marga Peeters (Contact Author)

De Nederlandsche Bank ( email )

PO Box 98
1000 AB Amsterdam
Amsterdam, 1000 AB
Netherlands

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