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An aim of policy. Economic policy targets include objectives such as high levels of employment and growth, low and stable levels of inflation, or maintenance of particular exchange rates. Policy targets are distinguished from both instruments and indicators. Policy instruments are variables the government or central bank can control, or at least influence, such as tax rates or the money supply. Policy instruments can themselves be targets, but often are not, and targets such as the rate of inflation are clearly not instruments. Policy indicators are variables used in deciding on the use of policy instruments; indicators which are not themselves targets may be preferred to targets for this task because they are available sooner or can be measured more reliably than targets. See also macroeconomic policy.

Subjects: Economics.

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