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Monetary Policy Strategies

  • Ansgar BelkeEmail author
  • Thorsten Polleit
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Strategy Requirements

On the Monetary Policy Strategy

In most western industrialised countries, the primary objective of monetary policy is the maintenance of price stability. However, central banks cannot control the prices directly by using the monetary policy instruments at its disposal. Instead, they face a complex transmission process, which describes the stages with which a change in money supply/short-term interest rates leads to changes in the economy’s price level Friedman 1975. The transmission process is typically subject to variable and not fully predictable time lags. In fact, it can be expected to be continuously changing in response to changes in economic behaviour and institutional structures.

Under a monetary policy regime with discretionary elements, there is a need for an organizing analytical frameworkfor monetary policy decision makers. Such framework would help to order, analyse and interpret monetary policy relevant data and present and announce policy...

Keywords

Interest Rate Monetary Policy Central Bank Euro Area Money Supply 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

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© Springer-Verlag Berlin Heidelberg 2009

Authors and Affiliations

  1. 1.Chair for MacroeconomicsUniversity Duisburg-Essen Faculty of Economics and Business Administration45117 EssenGermany
  2. 2.Frankfurt School of Finance & Management60314 Frankfurt am MainGermany

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