"Should Monetary Policy Target the Price Level?"
Institution(s): Hong Kong Institute of Economics and Business Strategy, Hong Kong Institute for Monetary Research, British Council
Date: Mar 19, 2003 (Wednesday)
Time: 05:30 pm -
Venue: Rayson Huang Theatre, The University of Hong Kong, Pokfulam Road, Hong Kong
Cost: Free of Charge
Enquires: Tel: (852) 2548 9300
Sponsors: Cardiff University; School of Economics and Finance at The University of Hong Kong; Welsh Development Agency
Existing monetary policies generally target the inflation rate. Patrick Minford will discuss new research published in the latest Economic Journal. He argues that making the policy target the level of prices would bring significant benefits to the economy by reducing indexation of wages, which is damaging to economic stability. He will also discuss the application of such a policy in the context of deflation, where price level targeting has the noted advantage that prices will be expected to return to their target level. This creates an expectation of rising prices, which has the effect of stimulating spending in the deflationary situation, until prices have returned to target. Hence, the price level target builds in an extra stabiliser against deflationary shocks.
Prof. Patrick Minford has held numerous Economic Adviser Posts for prominent organizations such as the Ministry of Overseas Development in London, and the H.M. Treasury Delegation of the British Embassy in Washington D.C. He was awarded a PhD in Economics in 1973. Professor Minford became Director of Merseyside Development Corporation in 1998. He was a member of the Monopolies and Mergers Commission and Member of H.M. Treasury Panel of Independent Economic Forecasters (‘6 Wise Men’). He also became a member of the Academic Council of Economic Affairs and of the Academic Advisory Board – Institute of Economic Affairs. Prof. Minford has published numerous books and articles on exchange rates, unemployment, housing and macroeconomics and occasionally writes for The Daily Telegraph. He was awarded a CBE in January 1996 for his services to economi