Targeting Nominal Income: A Note / Kenneth D. West.

Format:

Book

Author/Creator:

West, Kenneth D.

Contributor:

National Bureau of Economic Research.

Series:

Working Paper Series (National Bureau of Economic Research) no. w1835.

NBER working paper series no. w1835

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

Targeting Nominal Income

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 1986.

Summary:

This paper compares nominal income and monetary targets in a standard aggregate demand - aggregate supply framework. If the desirability of policies is measured by their effect on the unconditional variance of output, nominal income targeting is preferable if and only if the aggregate elasticity of demand for real balances is greater than one. This is precisely the opposite of the condition that in Bean (1984) is sufficient to make nominal income targeting preferable.This points out the importance of specification of supply and of objective function in work on nominal income targeting.

Notes:

Print version record

February 1986.