In page navigation
Nominal anchor
Invezz is an independent platform with the goal of helping users achieve financial freedom. In order to fund our work, we partner with advertisers who compensate us for users that Invezz refers to their services. While our reviews and assessments of each product on the site are independent and unbiased, brands may pay to appear higher up our table rankings or place ads in specific areas of the site. The order in which products and services appear on Invezz does not represent an endorsement from us, and please be aware that there may be other platforms available to you than the products and services that appear on our website. Read more about how we make money >
A mechanism for determining the general price level in an economy. The need for equilibrium in markets for goods and factor services determines the structure of relative prices, but this could be achieved with any absolute price level. The monetary authorities may simply proclaim an intention to keep some price index stable, but this promise may lack credibility. A nominal anchor is a way of making such promises credible. Possible methods include using a commodity such as gold or silver as money, or adopting a fixed exchange rate with some other currency, such as the US dollar, which already has a reputation for price stability.
Reference: Oxford Press Dictonary of Economics, 5th edt.
More definitions
Invezz is a place where people can find reliable, unbiased information about finance, trading, and investing – but we do not offer financial advice and users should always carry out their own research. The assets covered on this website, including stocks, cryptocurrencies, and commodities can be highly volatile and new investors often lose money. Success in the financial markets is not guaranteed, and users should never invest more than they can afford to lose. You should consider your own personal circumstances and take the time to explore all your options before making any investment. Read our risk disclaimer >