Managed floating as a strategy to achieve selected monetary policy objectives

This paper employs text-mining techniques to analyse the communication strategy of the Central Bank of Nigeria (CBN) during the period 2004-2019. Since the policy communique released after each meeting of the CBN’s monetary policy committee (MPC) represents an important tool of central bank communication, we construct a corpus based on 87 policy communiques with a total of 123, 353 words. Having processed the textual data into a form suitable for analysis, we examined the readability, sentiments, and topics of the policy documents. While the CBN’s communication has increased substantially over the years, implying increased monetary policy transparency; the computed Coleman and Liau readability index shows that the word and sentence structures of the policy communiques have become more complex, thus reducing its readability. In terms of monetary policy sentiments, we find an average net score of -10.5 per cent, reflecting the level of policy uncertainties faced by the MPC over the sample period. In addition, our results indicate that the topics driving the linguistic contents of the communiques were influenced by the Bank’s policy objectives as well as the nature of shocks hitting the economy per period.

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Implementing optimal monetary policy: Objectives and rules

Economic Modelling ◽

10.1016/j.econmod.2010.01.015 ◽

2010 ◽

Vol 27 (3) ◽

pp. 737-745 ◽

Cited By ~ 3

Author(s):

Huiping Yuan ◽

Stephen M. Miller

Keyword(s):

Monetary Policy ◽

Optimal Monetary Policy ◽

Policy Objectives

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Basic Monetary Policy Objectives

The Federal Reserve ◽

10.1093/wentk/9780199934485.003.0003 ◽

2013 ◽

Author(s):

Stephen H. Axilrod

Keyword(s):

Monetary Policy ◽

Interest Rates ◽

Federal Reserve ◽

Policy Objectives ◽

Important Objective

What are the Fed’s basic objectives? As noted in the preceding chapter, the goals set for monetary policy in the Federal Reserve Act are maximum employment, stable prices, and low, long-term interest rates. The Fed’s other very important objective, the maintenance of systemic stability...

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DIRECTIONS OF ADAPTATION OF THE NBU MONEY AND CREDIT ADJUSTMENT TO THE INFLATION TARGETING MODE ON THE EXAMPLE OF NEW ZEALAND

Economic Analysis ◽

10.35774/econa2018.01.196 ◽

2018 ◽

pp. 196-205

Author(s):

Liudmyla Seheda

Keyword(s):

Monetary Policy ◽

New Zealand ◽

Inflation Targeting ◽

Banking System ◽

Business Environment ◽

Transitional Period ◽

Mathematical Methods ◽

National Interests ◽

Policy Objectives ◽

Low Efficiency

Introduction. The article deals with the main problems of adaptation of the NBU monetary and credit regulation to the inflation-targeting mode. The main reasons for the low efficiency of the introduction of world experience in the field of monetary policy to domestic realities are considered. The methodical recommendations for increasing the efficiency of monetary regulation, optimizing the monetary mode of inflation targeting and implementing the monetary rule in the practice of realization of monetary policy of the NBU are developed. Purpose. The article aims to study the world experience in the field of adapting monetary and credit regulation to the monetary mode of inflation targeting on the example of New Zealand and to develop the theoretical and practical conclusions for Ukraine. Method (methodology). The following general scientific methods have been used in this research: method of synthesis and generalization (to substantiate the basic problems of monetary regulation in the context of realization of the monetary regime of inflation targeting in Ukraine); methods of analysis and comparison (to study the experience of New Zealand in the field of the formation of the monetary mode of inflationary regulation); statistical and mathematical methods (to develop monetary rule in Ukraine). Results. The main problems of low efficiency of monetary regulation in Ukraine that are related to the neglect of national interests, imbalances in the development of the national economy, inappropriate structure of exports and imports, negative business environment, and conditions for the absorption of monetary impulses have been identified. The experience of New Zealand in the field of the formation of the monetary mode of inflation targeting has been researched. It has been made the conclusion concerning a long transitional period during which, at the level of inflationary purposes, de facto, as intermediate monetary policy objectives, the exchange rate and liquidity of the banking system are used. The monetary rule for Ukraine has been developed. The methodical recommendations for increasing the effectiveness of the monetary and credit regulation of the NBU within the framework of flexible inflation targeting have been worked out.

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Should monetary policy lean against the wind in a small-open economy? Revisiting the Tinbergen rule

10.36095/banxico/di.2021.01 ◽

2021 ◽

Author(s):

Rogelio De la Peña

Keyword(s):

Monetary Policy ◽

Open Economy ◽

Monopolistic Competition ◽

Financial Frictions ◽

Small Open Economy ◽

Central Banks ◽

Welfare Cost ◽

Policy Regimes ◽

Policy Objectives ◽

Single Instrument

It has been debated whether monetary policy should lean against the wind, i.e., if central banks should also respond to the build-up of financial imbalances. I contribute to the debate by showing that targeting the two policy objectives with a single instrument is more costly for a small-open economy than for a closed one. To this end, I develop a small-open economy DSGE model with the Bernanke-Gertler-Gilchrist financial accelerator that features financial frictions and monopolistic competition in goods markets. I then estimate this model for Mexico to explore the policy regimes yielding the lowest welfare cost. My main finding is that the Tinbergen rule is alive and well. In addition, my model is useful to gauge macroprudential measures effectiveness when discriminating against foreign liabilities.

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The Real but Limited Influence of Expert Ideas

World Politics ◽

10.1017/s0043887109990104 ◽

2009 ◽

Vol 61 (4) ◽

pp. 703-730 ◽

Cited By ~ 54

Author(s):

Johannes Lindvall

Keyword(s):

Monetary Policy ◽

Economic Policy ◽

Exchange Rate ◽

Strong Influence ◽

Policy Instruments ◽

Policy Changes ◽

Level Of Activity ◽

Policy Objectives ◽

The Rich ◽

Selection Of

A number of influential studies in political science argue that important economic policy changes in the rich democracies since the mid-1970s were caused by the introduction of new economic ideas. This article claims that while experts exert strong influence over the selection of policy instruments, their influence over the formulation of policy objectives is much weaker. In the 1970s, 1980s, and 1990s, the predominance of Keynesianism in Austria and Denmark did not lead Austrian and Danish governments to maintain low unemployment longer than Sweden, where Keynesianism was less strong. But it did lead them to regard fiscal policy as an instrument that can be used to control the level of activity in the economy, while their Swedish counterparts relied instead on exchange rate and monetary policy.

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