US Federal Open Market Committee (FOMC) projections for the federal funds rate are inherently subject to revision with the availability of new data. But when issued jointly with projections for macroeconomic aggregates, they also contain conditional information about the intended future policy...

New Zealand's operationally independent Reserve Bank should remain focused on achieving its primary objective of stability in the general level of prices. This should be under widely accepted flexible inflation targeting conditions and without distraction from at best temporarily effective...

This paper conducts a comparative analysis of the performances of the forward guidance strategies adopted by the Reserve Bank of New Zealand, the Norges Bank and the Riksbank, with the aim to gauge whether forward guidance via publication of an own interest rate path enhances a central bank’s...

Since the 1990s there have been major changes in the way monetary policy is conducted. Since other monetary strategies did not result in the desired outcome, the first concept of inflation targeting was presented in New Zealand (1990), then in Canada (1991), England (1992), Sweden and Finland...

This paper examines the choice of a monetary-policy rule in a simple macroeconomic model. In a closed economy, the optimal policy is a output and inflation. In an open economy, the optimal rule changes in two ways. First, the policy instrument is a Conditions Index the exchange rate. Second, on...

One advantage cited for formal inflation targeting is that by anchoring inflationary expectations this policy framework would aid in the pricing of long-term securities. Long-term interest rates would become less sensitive to temporary shocks to the economy including policy-induced changes in...