Research report

The meaning of monetary stability

    30.09.2016

27

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.
Collections
Faculty
Faculté des sciences économiques et sociales
Language
  • English
Classification
Economics
Other electronic version

Faculté SES

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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