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How to Weigh Unemployment Relative to Inflation in Monetary Policy?
Journal article   Peer reviewed

How to Weigh Unemployment Relative to Inflation in Monetary Policy?

L.E.O. Svensson
Journal of Money, Credit and Banking, Vol.46, pp.183-188
2014

Abstract

E52 E58 inflation targeting Federal Reserve Sveriges Riksbank Business, Finance;Economics;Business & Economics
The monetary policy mandate for the Federal Reserve and of the Riksbank are essentially the same and boil down to stabilizing inflation around the inflation target and employment or unemployment around a long-run sustainable rate. The relative weight on stabilizing unemployment or employment versus stabilizing inflation may be close to one. A positive unemployment-gap forecast normally calls for a positive inflation-gap forecast.

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