01751cas a2200253 a 4500 AALejournalIMF001331 230101c9999 xx r poo 0 0eng d 5.00 USD 9781451857573 1018-5941 BD-DhAAL BD-DhAAL Gaiduch, Victor. Inflation Targeting Under Potential Output Uncertainty / Victor Gaiduch, Benjamin Hunt. Washington, D.C. : International Monetary Fund, 2000. 1 online resource (29 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students To achieve their price stability objectives, many monetary authorities use the gap between current and potential output as an indicator of future price pressures. This policy-setting strategy has been criticized because potential output estimates have a high degree of uncertainty. In this paper, estimates of potential output uncertainty in New Zealand are used to examine the output gap's usefulness. The results suggest that although output gap uncertainty leads to more inflation and output variability, policy based directly and/or indirectly on the output gap leads to better macroeconomic stability than policy based only on observable inflation and output growth. Mode of access: Internet Hunt, Benjamin. IMF Working Papers; Working Paper ; No. 2000/158 Full text available on IMF http://elibrary.imf.org/view/journals/001/2000/158/001.2000.issue-158-en.xml IMF e-Library