Report

Monetary targeting in a dynamic macro model

Abstract: The consequences of a straightforward monetary targeting scheme are examined for a simple dynamic macro model. The notion of ?targeting? used is the strategic one introduced by Rogoff (1985). Numerical calculations are used to demonstrate that for the model under consideration, monetary targeting is likely to lead to a deterioration of policy performance. These examples cast doubt upon the general efficacy of simple targeting schemes in dynamic rational expectations models.

Keywords: Monetary policy - United States; Monetary policy; Money supply;

Bibliographic Information

Provider: Federal Reserve Bank of Minneapolis

Part of Series: Staff Report

Publication Date: 1987

Number: 111