[{"data":1,"prerenderedAt":-1},["ShallowReactive",2],{"detail-sidebar-cat-0-en-105":3,"doc-seo-427662-105":59,"doc-detail-427662-en":130},{"code":4,"msg":5,"data":6},0,"success",[7,13,18,23,28,33,38,43,48,51,55],{"id":8,"doc_module":4,"doc_module_name":9,"category_name":10,"show_sort_weight":11,"slug":12},1,"Document","Story & Novel",90,"story-novel",{"id":14,"doc_module":4,"doc_module_name":9,"category_name":15,"show_sort_weight":16,"slug":17},2,"Literature",80,"literature",{"id":19,"doc_module":4,"doc_module_name":9,"category_name":20,"show_sort_weight":21,"slug":22},4,"Exam",70,"exam",{"id":24,"doc_module":4,"doc_module_name":9,"category_name":25,"show_sort_weight":26,"slug":27},5,"Comic",60,"comic",{"id":29,"doc_module":4,"doc_module_name":9,"category_name":30,"show_sort_weight":31,"slug":32},6,"Technology",50,"technology",{"id":34,"doc_module":4,"doc_module_name":9,"category_name":35,"show_sort_weight":36,"slug":37},7,"Healthcare",40,"healthcare",{"id":39,"doc_module":4,"doc_module_name":9,"category_name":40,"show_sort_weight":41,"slug":42},8,"Research & Report",30,"research-report",{"id":44,"doc_module":4,"doc_module_name":9,"category_name":45,"show_sort_weight":46,"slug":47},9,"Religion & Spirituality",20,"religion-spirituality",{"id":46,"doc_module":4,"doc_module_name":9,"category_name":49,"show_sort_weight":46,"slug":50},"World Cup","world-cup",{"id":52,"doc_module":4,"doc_module_name":9,"category_name":53,"show_sort_weight":52,"slug":54},10,"Lifestyle","lifestyle",{"id":56,"doc_module":4,"doc_module_name":9,"category_name":57,"show_sort_weight":24,"slug":58},19,"General","general",{"code":4,"msg":60,"data":61},"ok",{"site_id":62,"language":63,"slug":64,"title":65,"keywords":66,"description":67,"schema_data":68,"social_meta":123,"head_meta":125,"extra_data":127,"updated_unix":129},105,"en","credibility-begins-with-a-clear-commitment-to-price-stability","Credibility Begins with a ClearCommitment to Price Stability","","The text explains how the shift to fiat currency after gold convertibility ended left monetary policy without a stable nominal anchor. It argues that long-run economic outcomes depend heavily on expectations about future policy, formed through history, announcements, and policymakers’ incentives. Clear commitment to price stability, anchored by an explicit Consumer Price Index objective, shapes market interest rates, contractual behavior, savings, and investment. Credible expectations reduce costly adjustments and help prevent persistent declines in purchasing power.",{"@graph":69,"@context":122},[70,84,105],{"@type":71,"itemListElement":72},"BreadcrumbList",[73,77,79,82],{"item":74,"name":75,"@type":76,"position":8},"https://docshare.wps.com","Home","ListItem",{"item":78,"name":9,"@type":76,"position":14},"https://docshare.wps.com/document/",{"item":80,"name":40,"@type":76,"position":81},"https://docshare.wps.com/document/research-report/",3,{"item":83,"name":65,"@type":76,"position":19},"https://docshare.wps.com/document/credibility-begins-with-a-clear-commitment-to-price-stability/427662/",{"url":83,"name":65,"@type":85,"image":86,"author":91,"headline":65,"publisher":94,"fileFormat":97,"inLanguage":63,"description":67,"dateModified":98,"datePublished":99,"encodingFormat":97,"isAccessibleForFree":100,"interactionStatistic":101},"DigitalDocument",{"url":87,"@type":88,"width":89,"height":90},"https://docshare.wps.com/thumbnails/credibility-begins-with-a-clear-commitment-to-price-stability/427662.png","ImageObject",300,407,{"name":92,"@type":93},"Aran","Person",{"url":74,"name":95,"@type":96},"DocShare","Organization","application/pdf","2026-10-21","2026-09-29",true,{"@type":102,"interactionType":103,"userInteractionCount":34},"InteractionCounter",{"@type":104},"ViewAction",{"@type":106,"mainEntity":107},"FAQPage",[108,114,118],{"name":109,"@type":110,"acceptedAnswer":111},"Why is a nominal anchor important after the gold standard ended?","Question",{"text":112,"@type":113},"Without a long-run anchor such as gold, monetary policy decisions gain greater influence on long-run performance, and money growth can drift without a clear objective.","Answer",{"name":115,"@type":110,"acceptedAnswer":116},"How do public expectations affect monetary policy outcomes?",{"text":117,"@type":113},"Expectations about current and future policies influence interest rates and contractual terms, which then affect savings, investment, prices, and real economic activity.",{"name":119,"@type":110,"acceptedAnswer":120},"How can unclear or frustrated expectations harm workplaces and the labor market?",{"text":121,"@type":113},"When employers promise more than current and expected income can support, expectations become frustrated, forcing difficult adjustments that can show up in economic data and cause substantial human suffering.","https://schema.org",{"og:url":83,"og:type":124,"og:title":65,"og:site_name":95,"og:description":67},"article",{"robots":126,"canonical":83},"index,follow",{"doc_id":128,"site_id":62},427662,1790888628,{"code":4,"msg":5,"data":131},{"doc_id":128,"user_id":132,"nickname":92,"user_avatar":133,"doc_module":4,"category_id":39,"category_name":40,"doc_title":65,"doc_description":67,"doc_content":134,"file_id":135,"file_url":136,"file_type":137,"file_size":138,"view_count":34,"is_deleted":4,"is_public":8,"is_downloadable":8,"audit_status":8,"page_count":24,"language":139,"language_code":63,"site_id":62,"html_lang":63,"table_of_contents":140,"faqs":141,"seo_title":142,"seo_description":67,"update_tm":143,"read_time":144},137455076865,"https://ap-avatar.wpscdn.com/davatar_29158cc5080c5b710cf443261637dec0","by Jerry L.Jordan  \nIn the summer of 1971,the United Statessuspended thelimited convertibility ofthe dollar for gold.Convertibility had notbeen operational for some time,exceptto foreign govemments by special arrange-ment.Nevertheless,with the suspensioncame the recognition that America hadcast aside its last formal commitment togold convertibility and was now operatingon a purely fiat currency.The idea of thedollar first being one-twentieth and thenone-thirty-fifth of an ounce of gold,thenbeing \"worth\"what a dollar would buy,without reference to some more basicstandard ofvalue,was a gradual process  \nThe performance of currencies lackinga nominal anchor has been an importantfactor in determining economic condi-tions in the United States—and through-out the worldsince that time.Without along-run anchor of valuation such as gold,the decisions and actions of monetarypolicy authorities start to have a signifi-cant influence on long-run economicperformance.The vagaries of the goldmarket that often led to sharp upswingsand downturns in the price level,butaround a constant trend,have been re-placed by the day-to-day judgments ofcentral bankers.Although policymakershave eliminated the large cyclical fluc-tuations in the price level,they have doneso at the cost of a long-term decline inthe purchasing power of money.  \nThe actual effects of Federal Reservepolicy actions depend,in part,on thepublic's prior expectations of currentpolicies and on its current expectationsof future policies.Expectations influence  \n# Credibility Begins with a ClearCommitment to Price Stability\n\nthe results of policy through a varietyof channels.Expectations of futureprices in financial marketsaffect interestrates and a wide variety of contractshat,in turn,affect prices and real eco-nomic activity,particularly throughdecisions about saving and investing.  \nA broad set of factors influences thepublic's expectations of Federal Reservepolicy,including history,recent publicannouncements,and individual percep-tions of the views held by monetarypolicymakers.Actual policy decisionsdepend importantly on the incentives andconstraints facing policymakers.Theseincentives and constraints color howpeople form expectations about futureinflation and how firmly they adhere tothem in the face of changing economiccircumstances and political pressures.  \n## ■ The Importance of Expectations\n\nAlmost every decision we make in ourlives is based on expectations about thebehavior of others.When driving on atwo-lane road passing motorists goingthe other way at 60 miles per hour,youdo so under the assumption that theywill stay in their own lane:After all,this is the law,the custom,and in theself-interest of everyone involved.Suchexpectations are so well founded and soseldom wrong that we don't give them asecond thought.  \nAnother example might be our expecta-tions about work,which also considerthe future behavior of others.Employeesexpect certain working conditions,pay,and job security,whether or not these  \nOctober 1,1993  \nFederal Reserve Bank of ClevelandPresident Jerry L.Jordan advocatesa policy of price stability based on anexplicit objective for the ConsumerPrice Index,a plan that would providea nominal anchor for the dollar as wellas a clear standard by which to meas-ure the success of monetary policy.  \nfactors are written into contracts.Poli-cies,both governmental and within thecompany,help people form expectations;how the company has treated others inthe past also enters the equation.Theemployer gets a reputation for playing(or not playing)by the rules,whichaffects the quality of the people that applyfor future employment.  \nMany of the stressful situations we seein the labor arena today are a result offrustrated expectations.Some companieshave found that they promised employ-ees too much relative to current and ex-pected future income.This change inexpectations leads to difficult adjust-ments that may show up in nationaleconomic statistics and represent sub-stantial human s","cbCaibNQvlfiFoP1","https://ap.wps.com/l/cbCaibNQvlfiFoP1","pdf",1999571,"English","# Credibility Begins with a ClearCommitment to Price Stability\n## The Importance of Expectations","[{\"question\":\"Why is a nominal anchor important after the gold standard ended?\",\"answer\":\"Without a long-run anchor such as gold, monetary policy decisions gain greater influence on long-run performance, and money growth can drift without a clear objective.\"},{\"question\":\"How do public expectations affect monetary policy outcomes?\",\"answer\":\"Expectations about current and future policies influence interest rates and contractual terms, which then affect savings, investment, prices, and real economic activity.\"},{\"question\":\"How can unclear or frustrated expectations harm workplaces and the labor market?\",\"answer\":\"When employers promise more than current and expected income can support, expectations become frustrated, forcing difficult adjustments that can show up in economic data and cause substantial human suffering.\"}]","Credibility Begins with a ClearCommitment to Price Stability | PDF",1790644491,13]