The Lower and Upper Bounds of the Federal Open Market Committee's Long-Run Inflation Objective (ICPSR 1344)

Published: May 16, 2007 View help for published

Principal Investigator(s): View help for Principal Investigator(s)
Daniel L. Thornton, Federal Reserve Bank of St. Louis

https://doi.org/10.3886/ICPSR01344.v1

Version V1

It is widely acknowledged that the Fed can control the average inflation rate over a period of time reasonably well. Because of this and the Federal Open Market Committee's (FOMC's) long-standing commitment to price stability, the author argues that the FOMC has an implicit long-run inflation objective (LIO) lower and upper bounds to the long-run inflation rate. He shows that the statements made by the FOMC in 2003 clarified the lower bound of its LIO and that the average of long-run inflation expectations responded by rising about 80 basis points. Moreover, consistent with reducing the market's uncertainty about the FOMC's LIO, long-run inflation expectations became more stable. The FOMC has recently been more specific about the upper bound of its LIO as well. The FOMC could eliminate the remaining uncertainty by establishing an explicit, numerical inflation objective.

Thornton, Daniel L. The Lower and Upper Bounds of the Federal Open Market Committee’s Long-Run Inflation Objective. Ann Arbor, MI: Inter-university Consortium for Political and Social Research [distributor], 2007-05-16. https://doi.org/10.3886/ICPSR01344.v1

Export Citation:

  • RIS (generic format for RefWorks, EndNote, etc.)
  • EndNote
Federal Reserve Bank of St. Louis. Research Division
Inter-university Consortium for Political and Social Research

(1) One Excel file is both a data and program file. (2) These data are part of ICPSR's Publication-Related Archive and are distributed exactly as they arrived from the data depositor. ICPSR has not checked or processed this material. Users should consult the investigators if further information is desired.

2007-05-16

2007-05-16

2018-02-15 The citation of this study may have changed due to the new version control system that has been implemented. The previous citation was:
  • Thornton, Daniel L. The Lower and Upper Bounds of the Federal Open Market Committee's Long-Run Inflation Objective. ICPSR01344-v1. Ann Arbor, MI: Inter-university Consortium for Political and Social Research [distributor], 2007-05-16. http://doi.org/10.3886/ICPSR01344.v1

Notes

  • These data are flagged as replication datasets and are distributed exactly as they arrived from the data depositor. ICPSR has not checked or processed this material. Users should consult the investigator(s) if further information is desired.

  • The public-use data files in this collection are available for access by the general public. Access does not require affiliation with an ICPSR member institution.

ICPSR logo

This study is provided by ICPSR. ICPSR provides leadership and training in data access, curation, and methods of analysis for a diverse and expanding social science research community.