I review the literature regarding the impact of financial innovation on the monetary transmission mechanism and on the way the central bank can achieve its ultimate goal, that is to control the price level. We argue that, although the form of central bank instruments and current methods for...

Most central banks are required or choose to stabilize a price index, largely by manipulating short term interest rates. A serious problem is what index to choose among the national income deflator, wholesale prices, the cost of living, with or eliminating highly volatile commodities such as...

The purpose of this paper is to estimate the specific impact of the introduction of the euro on Italian consumer inflation that can be attributed solely to the rounding of prices to figures that are "attractive" in euro. The empirical analysis is based on a large sub-set of prices used by Istat...

The presence of price stickiness implies that in the short term adjustment to demand or supply shocks takes place through quantities. This paper approaches the issue of nominal price stickiness in Italy by analysing the cross-sectional distributions of the changes in sectoral consumer price...

After two decades of successfully restoring price stability in much of the world economy, central banks begin the next millennium facing a new set of challenges. One key task is how to conduct monetary policy in an era of price stability. Clearly, policymakers would like inflation to remain...

Despite the low inflation of recent years, some observers have wondered whether rapid gains in U.S. asset prices foreshadow rising inflationary pressures. Would U.S. monetary policy be improved if Federal Reserve policymakers reacted systematically to changes in the prices of widely held assets...

Many analysts have advocated using commodity prices as a guide for monetary policy. A necessary condition is that changes in commodity prices are good predictors of future aggregate price changes. This paper examines that proposition. It shows that while commodity prices can help produce more...

The Neal Resolution, now in Congress, would make price stability the dominant goal of monetary policy. The first of these two articles holds that policymakers’ discretion over the price level increases political conflict. Further, it argues that removing this discretion would restore the...

The Neal Resolution, now in Congress, would make price stability the dominant goal of monetary policy. The first of these two articles holds that policymakers’ discretion over the price level increases political conflict. Further, it argues that removing this discretion would restore the...