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RBA Glossary definition for inflation target

inflation target – A tool to guide monetary policy expressed as a preferred range or figure for the rate of increase in prices over a period. In Australia, the inflation target is between 2 and 3 per cent per annum on average over the course of the business cycle.

RBA Glossary definition for inflation

inflation – A measure of the change (increase) in the general level of prices.

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Monetary Policy Instruments: A Theoretical Analysis

1 Jul 1989 RDP 8905
Malcolm L. Edey
Research Discussion Papers contain the results of economic research within the Reserve Bank
https://www.rba.gov.au/publications/rdp/1989/8905.html

Conclusion

1 Jul 1989 RDP 8905
Malcolm L. Edey
Under such a rule, the interest rate would respond positively to any deviation of the relevant nominal variable from target. ... Of the two, the nominal income target always results in the more stable path for real output.
https://www.rba.gov.au/publications/rdp/1989/8905/conclusion.html

Introduction

1 Jul 1989 RDP 8905
Malcolm L. Edey
Should prices or nominal GDP be targeted? Should targets be subject to base drift (i.e. ... taking actual outcomes, as opposed to target values, as the base point for projections)?
https://www.rba.gov.au/publications/rdp/1989/8905/introduction.html

Price Targets or Nominal Income Targets?

1 Jul 1989 RDP 8905
Malcolm L. Edey
https://www.rba.gov.au/publications/rdp/1989/8905/price-targets-or-nominal-income-targets.html

Targets with and without Base Drift

1 Jul 1989 RDP 8905
Malcolm L. Edey
RDP 8905: Monetary Policy Instruments: A Theoretical Analysis 6. Targets with and without Base Drift. ... In that case, the model implies that targets with and without base drift perform equally well.
https://www.rba.gov.au/publications/rdp/1989/8905/targets-with-and-without-base-drift.html

Price Level Determination in a Simple Model

1 Jul 1989 RDP 8905
Malcolm L. Edey
In the special case where the target price level is constant, the solution reduces to. ... so that the price level fluctuates randomly around the target in response to real shocks.
https://www.rba.gov.au/publications/rdp/1989/8905/price-level-determination-in-a-simple-model.html

Simple Rules of Thumb for Interest Rate Policy?

1 Jul 1989 RDP 8905
Malcolm L. Edey
Other things equal, a high interest rate response to a given target overshoot is called for when:. ... Both policies require that the interest rate be changed in proportion to any deviation of prices from target.
https://www.rba.gov.au/publications/rdp/1989/8905/simple-rules-of-thumb-for-interest-rate-policy.html