Maximizing price stability in a monetary economy

Article 127 of the Treaty on the Functioning of the European Union establishes that the primary objective of the European Central Bank (ECB) is to maintain price stability. In this paper we propose that the ECB fund a transition-job for anyone willing and able to work, at a wage fixed by the ECB, for the further purpose of enhancing the achievement of its single mandate of price stability. In addition to superior price stability, the transition-job will define a form of full employment and work to balanced economic growth. Estimations of this proposal and the ongoing ECB's unconventional monetary policy show that public purpose is best served by the selection of the alternative buffer stock policy that is directly managed by the ECB. (C) 2017 The Society for Policy Modeling. Published by Elsevier Inc. All rights reserved.