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 ?
Therefore, the objective of price stability should be assigned to monetary policymakers, but the objective of high and rising living standards should not be.
The monetary policy strategy chosen by the Governing Council ensures a comprehensive assessment of the economic situation, of the size and nature of the shocks hitting the euro area, and of the related risks to price stability.
A central bank's commitment to price stability over the longer term, however, does not mean that the monetary authorities can ignore the short-term impact of economic events.
Yet he finds rising inequality in Florence in the period of price stability between 1330 and 1427, and falling inequality in the United States in the inflationary years 1910-1970.
Putting a price tag on regaining price stability may be impossible, but some economists have been bold enough to try.
Hungary does not fulfil the price stability and exchange rate criteria and legislation in Hungary is not fully compatible with the Treaty.
Inflation is now back in positive territory and closer to the ECB's definition of price stability, but core inflation remains on the low side.
The question "Is price stability enough?" (White 2006) goes to the core of the problem.
First, I will explain why maintaining price stability requires more than just keeping inflation low--it also requires keeping inflation expectations low and secure in the face of potential inflationary risks.
The Maastricht Treaty assigns the European Central Bank a clear mandate, namely to maintain price stability. Because of the long and variable lags in the transmission of monetary policy to price developments, a central bank can only control inflation over the medium term.
The Bank of Japan will review its basic thinking on price stability, and disclose a level of inflation rate that its Policy Board members currently understand as price stability from a medium- to long-term viewpoint, in their conduct of monetary policy (''an understanding of medium- to long-term price stability.'') Board members will conduct monetary policy in the light of such thinking and understanding.
"The Committee will respond to changes in economic prospects as needed to fulfill its obligation to maintain price stability," the Fed said in its press release for the March 22 meeting.