Progress toward Price Stability: A 1998 Inflation Report

Many economists believe that price stability is the primary goal of monetary policy because it is thought to foster maximum sustainable economic growth. Price stability is often said to exist when changes in the general price level cease to be a factor in the decision processes of businesses and individuals. By this definition, price stability was not literally achieved in 1998, as many measures of the price level continued to rise, and inflation expectations were well above zero. Yet in 1998, consumer prices rose at the lowest rate in over a decade, and any upward pressures on inflation were surprisingly subdued. Although many economists still worry about