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Research report

The meaning of monetary stability

BP2-STS

    30.09.2016

27

banking
consumer price index
deflation
inflation
monetary stability
money
payments
price stability
English The conventional approach to monetary stability is not so much different from that related to price stability. As such, it simply supposes that the aggregation of prices in the marketplace is necessary and sufficient for determining the presence of inflation (or deflation) in the economy. However, investigating monetary stability according to this microeconomic approach leads to confusion since the aggregation of price data, as suggested in this paper, does not explain the source of inflationary (or deflationary) pressure on overall prices. Consequently, price instability does not necessarily imply the existence of monetary instability, and vice versa. Hence, this paper, besides presenting a new macroeconomic approach to monetary stability, explains the true source of upward (or downward) pressure on overall prices and then provides policy recommendations to prevent monetary instability.
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Faculty
Faculté des sciences économiques et sociales et du management
Language
  • English
Classification
Economics
Series statement
  • Working Papers SES ; 475
License
License undefined
Identifiers
  • RERO DOC 277537
  • RERO R008520609
Persistent URL
https://folia.unifr.ch/unifr/documents/305022
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