Elements of a two pillar strategy
- The basic development strategy that is presented remain the backbone of Bihar's economy in the near term.
In our experiments we set interest rates using a combined policy of nominal aggregate targeting and inflation rate targeting, or two pillar strategy as advocated by the European Central Bank.
51 Notes: No Solvency Feedback, UK in EMU, Two Pillar Strategy in Place.
The two pillar strategy
is a hybrid strategy which entails elements of monetary targeting and elements of inflation targeting.
It is clear from Duisenberg (1998), and elsewhere, that the ECB has adopted a two pillar strategy with a combination of money base targeting and inflation targeting and so in this paper we evaluate this rule against other rules nested within it.
However the differences in Euro Area output volatility between the two pillar strategy and a nominal target regime are nor statistically significant.
Indeed, on an 'equal weights' basis the two pillar strategy seems the best choice for the Euro Area.
The European Central Bank has a remit to maintain price level stability in the medium term, and it has developed a two pillar strategy, with interest rates being set in relation to a reference value of M3 and general (inflationary) conditions.
They conclude that the two pillar strategy adopted by the European Central Bank (ECB) is appropriate for European needs.