Abstract:The aim of the paper is to propose a new version of the productivity norm proposed by Hayek in 1928, as a feasible way to develop monetary policy by actual central banks. With this proposal, we are able both to review the convenience of the stability price objective adopted by most central banks and to permit price variations according to the evolution of productivity in increasingly open and competitive markets. By using a nominal income objective, central banks can distinguish, for example, between unwelcome… Show more
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