When does an inflation target yield the second best?

Authors
Beetsma, R Bovenberg, L
Citation
R. Beetsma et L. Bovenberg, When does an inflation target yield the second best?, SC J ECON, 103(1), 2001, pp. 119-126
Citations number
8
Categorie Soggetti
Economics
Journal title
SCANDINAVIAN JOURNAL OF ECONOMICS
ISSN journal
03470520 → ACNP
Volume
103
Issue
1
Year of publication
2001
Pages
119 - 126
Database
ISI
SICI code
0347-0520(2001)103:1<119:WDAITY>2.0.ZU;2-X
Abstract
It is shown that an inflation target does not establish the second best if the central bank is independent and the government collects seigniorage rev enues. To eliminate excessive inflation and ensure that stabilization is ef ficient, society should combine an optimal inflation target with a central bank that attaches less weight to inflation stabilization than the public d oes.