Monetary stabilisation and the stabilisation of output in select industrial countries



With most industrial countries now opting for monetary targets, a key question is whether this is also likely to stabilise income and output. The present paper looks at the recent history of a number of industrial countries and attempts to evaluate whether, if these countries had followed a more stable money supply policy, the growth of nominal income or output would have been stabilised. Two approaches are used in the analysis which indeed conclude that had a more stable money supply policy been implemented in the past, the growth of nominal income would in general have been more stable. The author then looks at the policy implications of the analysis.

JEL: E52, E63


monetary targets, money supply policy, income, output, stabilisation

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Reg. Tribunale di Roma n.377/2009 del 19/11/2009