Abstract
At the beginning of 1975, the Swiss National Bank decided to adopt a money stock target. The adjusted monetary base was chosen as an instrument for controlling the growth in the money stock. The aim of this policy was to maintain a stable price level. When the decision for targeting the money stock was taken, the Swiss National Bank realised that a revaluation of the Swiss franc would be inevitable. However, the size of the revaluation came as a surprise. The exchange rate difficulties emerging in the autumn of 1978, in particular, have raised the question whether money stock targeting under a system of flexible exchange rates is the appropriate way of conducting monetary policy in a small open economy.
For helpful comments and criticism I am especially indebted to George Rich. I have also benefited from discussions with members of the Research Division at the Swiss National Bank.
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References
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© 1981 Brian Griffiths and Geoffrey E. Wood
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Schiltknecht, K. (1981). Targeting the Base—the Swiss Experience. In: Griffiths, B., Wood, G.E. (eds) Monetary Targets. Palgrave Macmillan, London. https://doi.org/10.1007/978-1-349-16555-1_8
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DOI: https://doi.org/10.1007/978-1-349-16555-1_8
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