price stability


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Related to price stability: economic growth, full employment

Price Stability

The state in which a security or product's price changes fairly little in the face of increased or decreased demand. Price stability generally refers to securities with comparatively large number of shares outstanding; a large order to buy or sell is likely to affect the price less strongly than a similar order for a company with fewer shares outstanding. In other products, price stability is largely based on whether a given product is considered a necessity or a luxury. A "necessary" product is likely to be more stable.

price stability

the maintenance of an unchanged general level of prices over time in an economy. Price stability, especially the avoidance of rising prices (INFLATION), is one of the main objectives of MACROECONOMIC POLICY. See INTERNAL EXTERNAL BALANCE MODEL.
References in periodicals archive ?
When the Federal Reserve was founded in 1913, the Federal Reserve Act made no mention of price stability and its mandate was rather diffuse.
The Bank also attempted to clarify its empirical definition of price stability.
First achieving and now sustaining price stability is especially important as it reduces the uncertainties and risks that individuals and firms face in making financial decisions.
The case for maintaining price stability--in the United States and elsewhere--is rooted in experience and theory, which indicate that monetary policy best supports employment, economic growth, and financial stability by making price stability a priority.
The Federal Reserve has rebuilt its reputation for price stability, with the result that inflation expectations no longer parallel energy price patterns closely.
The treaty establishing the European Community assigned to the ECB the maintenance of price stability in the euro area as the primary objective and unambiguous mandate.
The provisional themes for the three meetings are: issues concerning measurement of prices; decline in prices and its implications for economic activities; and monetary policy amid uncertainty over price stability, the BOJ said.
Price stability prevents overinvestment in the financial sector, which in a high-inflation environment expands to profitably act as a middleman to help individuals and businesses escape some of the costs of inflation.
ECB president Wim Duisenberg warned that risks to price stability remained on the upside as a result of recent high oil prices and a weak euro which may force the ECB's hand soon.
Convergence culminated in the achievement of price stability throughout the euro area.
The first is opting for a swap, which gives you price stability at the current low level.
Perhaps the most important of these is the desire for price stability.