scholarly journals The primary goal of monetary policy: reflections on the nature of the problem

2021 ◽  
Vol 5 (1) ◽  
pp. 77-101
Author(s):  
Adam Hetmańczuk
Keyword(s):  
Monetary Policy ◽  
Central Bank ◽  
Design Research ◽  
High Growth ◽  
Point Of View ◽  
Price Stability ◽  
Future Price ◽  
Scientific Publications ◽  
The Us ◽  
Definition Of

Aim: In this article, the state of the discourse concerning the final goal of the modern central bank is presented, in particular the aim of price stability, understood as low and stable inflation.   Design/Research methods: The article was prepared on the basis of scientific publications in the field of monetary policy as well as materials and documents from different central banks, including the US Federal Reserve System and the European Central Bank.   Conclusions/findings: Low and stable inflation reduces uncertainty about future price developments. This facilitates decision-making for companies concerning production and investment, and for households concerning consumption and saving. From a macroeconomic point of view, price stability is a prerequisite for the efficient functioning of the economy and for achieving high growth rates. In practice, the need for a quantifiable definition has been disregarded, while only a descriptive and qualitative definition of price stability is insufficient for an effective monetary policy and the implementation of the anti-inflationary mission by the central bank.

scholarly journals Money supply growth and inflation – the monetary policy strategy of the European Central Bank

2007 ◽  
Vol 55 (3) ◽  
pp. 57-66
Author(s):  
Svatopluk Kapounek ◽  
Lubor Lacina
Keyword(s):  
Time Series ◽  
Monetary Policy ◽  
Central Bank ◽  
Money Supply ◽  
European Central Bank ◽  
Price Stability ◽  
Policy Strategy ◽  
European Central ◽  
Definition Of ◽  
Quantitative Definition

The main aim of this article is to find out whether there is a significant relationship between money supply growth and inflation in the Eurozone. For this reason, the monetary policy strategy of the European Central Bank (ECB) has been evaluated. Since the establishment of the ECB in January 1999 to May 2003 the ECB‘s monetary policy strategy consisted of three main elements: a quantitative definition of price stability, a prominent role for money in the assessment of risks to price stability (aggregate M3 as a reference value), and a broadly based assessment of the outlook for price developments. Nevertheless, since May 2003 M3 or any other monetary aggregate has lost its prominent role in the ECB‘s strategy. Therefore the nowadays ECB‘s monetary policy strategy consists of a quantitative definition of the primary objective of price stability and an analytical framework based on two pillars – economic analysis and monetary analysis. These two pillars are used by the ECB‘s Governing Council in the overall assessment of risks to price stability and in monetary policy decisions.The empirical part of this article is based on time series correlation between money supply growth and inflation in selected member countries of the Economic and Monetary Union (EMU - Eurozone) during the period 1995–2005. The time series are divided into two parts. The first part covers data for selected member countries of the European Union from 1995 till 1998, i.e. before the establishment of the EMU. Whereas the second part includes data for the whole Eurozone since its official start in 1999 to 2005. The time series are adjusted by SARIMA models.

scholarly journals THE ISSUE OF THE TRANSITION TO THE DIGITAL ROUBLE

2021 ◽  
pp. 198-208
Author(s):  
Иван Владимирович Кисаров
Keyword(s):  
Monetary Policy ◽  
Point Of View ◽  
Economic Point ◽  
New Model ◽  
Digital Currency ◽  
Definition Of ◽  
Monetary Circulation

Цель статьи - рассмотреть причины и императивы перехода валюты в цифровое состояние. Дано определение цифрового рубля, его особенностей с экономической точки зрения. Указаны возможные технологические решения при внедрении цифровой валюты. Отражено возможное влияние ввода цифрового рубля на денежно-кредитную политику, а также предложен вариант внедрения новой формы рубля в экономику. Выделены необходимые качества, которым должен обладать цифровой рубль. Научная новизна заключается в акцентировании внимания на проблемах, которые могут возникнуть в связи с переходом к новой модели цифрового кредитно-денежного обращения. The purpose of the article is to consider the reasons and imperatives of the transition of the currency to a digital state. The author gives the definition of the digital rouble describes its features from an economic point of view. The research indicates possible technological solutions for digital currency implementation and possible impact of the introduction of the digital rouble on monetary policy. The author highlights some necessary qualities characteristic for a digital ruble. The scientific novelty is to focus on the problems that may arise from the transition to a new model of digital monetary circulation.

Analysis of the Analytical Balance Sheet of Central Bank of Republic of Turkey During 2000 - 2009 Period in Terms of Crises

2014 ◽  
pp. 1284-1302
Author(s):  
Yıldız Özkök
Keyword(s):  
Monetary Policy ◽  
Central Bank ◽  
Balance Sheet ◽  
Central Banks ◽  
Money Market ◽  
Price Stability ◽  
Primary Target ◽  
Monetary Aggregates ◽  
Analytical Balance ◽  
Republic Of Turkey

Today, Central Banks' primary target is to maintain the price stability. In that context, through their monetary policy, they intervene in the money market with different tools. The Analytical Balance Sheet was created upon summing up and offsetting Balance Sheet of the Central Bank of Republic of Turkey (CBRT) in order to represent specific monetary aggregates. By means of that, CBRT aims to make the balance sheet more understandable and simple. In this chapter, firstly the sub items of the Analytical Balance Sheet are explained; secondly, the economic crises of Turkey during 2000-2009 is mentioned; finally, effects of these crises on the CBRT's Analytical Balance Sheet, changes in monetary aggregates which are Currency Issued, Reserve Money, Monetary Base, and Central Bank's Money, and in this context structure of the monetary policy of the CBRT in this period is analyzed.

Section 6 The European Central Bank

2019 ◽  
Author(s):  
Marcus Klamert ◽  
Manuel Kellerbauer ◽  
Jonathan Tomkin
Keyword(s):  
Monetary Policy ◽  
Central Bank ◽  
European Central Bank ◽  
Primary Objective ◽  
Price Stability ◽  
European Central

Article 282 provides for the ESCB, consisting of the ECB together with the NCBs (NCBs). Within the ESCB, the Eurosystem, comprised of the ECB and the NCBs of MS whose currency is the euro, conducts the Union’s monetary policy. The primary objective of the ESCB is to maintain price stability. The ECB is charged with authorizing the use of the euro and is independent in all respects.

scholarly journals Warehousing: A Historical Lesson in Central Bank Independence

2017 ◽  
pp. 1-4 ◽  
Author(s):  
Owen F. Humpage
Keyword(s):  
Monetary Policy ◽  
Central Bank ◽  
Foreign Exchange ◽  
Federal Reserve ◽  
Institutional Arrangement ◽  
Central Bank Independence ◽  
The Us ◽  
Foreign Exchange Exposure

This Economic Commentary explains how warehousing—a seemingly innocuous institutional arrangement between the Federal Reserve and the US Treasury—came to threaten the Fed’s independence. Warehousing began as an arcane procedure designed to help the Treasury cover a specific type of foreign-exchange exposure. It then grew into a supplemental source of funding for the Treasury's foreign-exchange interventions. Eventually the procedure morphed into a sizeable off-budget source of funding for other Treasury activities and seemed an inappropriate subversion of the congressional appropriations process, a development that raised concerns within the Fed about its ability to conduct monetary policy free from political concerns.

scholarly journals The price stability oriented monetary policy of the European Central Bank

2010 ◽  
Vol 13 (3) ◽  
pp. 5-15
Author(s):  
Wojciech Gasiński ◽  
Anna Misztal
Keyword(s):  
Monetary Policy ◽  
Central Bank ◽  
European Central Bank ◽  
Central Banks ◽  
Primary Objective ◽  
Price Stability ◽  
Economic Policies ◽  
European Central ◽  
Consumer Prices ◽  
European System

The aim of this paper is to present the price stability oriented monetary policy of the European Central Bank. The European Central Bank began activities in 1998 and the primary objective of the European System of Central Banks is to maintain price stability and the ESCB should also support the general economic policies in the Community. Monetary policy is a special tool that national governments and central banks uses to influence on its economy, especially to control the supply of money and to influence on the level of economic indicators. This paper investigates the assumed objective of the European System of Central Banks which is to maintain price stability. What is more, we would like to present the monetary policy strategy of the European Central Bank and analysis of the Harmonized Index of Consumer Prices.

Hungary’s rising prices may shift monetary policy

2019 ◽  
Keyword(s):  
Monetary Policy ◽  
Central Bank ◽  
Euro Area ◽  
Federal Reserve ◽  
Content Type ◽  
Core Inflation ◽  
The Us ◽  
Manufacturing Sectors ◽  
National Bank

Significance The sharp slide in the forint is fuelling inflationary pressures, testing the resolve of the National Bank (MNB -- the central bank) to continue providing stimulus to the economy. Despite a surge in core inflation in Hungary to 3.8%, the MNB is using this year’s dovish U-turns by the ECB and the US Federal Reserve (Fed) as cover to keep monetary policy ultra-loose. Impacts The dollar index is strengthening despite the dovish U-turn by the Fed and is putting an end to the sharp rally in EM currencies in January. Inflationary pressures will be muted across the euro-area, with core inflation falling to 0.8% in March, less than half the ECB’s target. PMIs show Czech and Polish manufacturing sectors continuing to contract and Hungarian growth at its weakest level since 2016.

Istisna’a based monetary policy and its effectiveness in achieving full employment and price stability

2020 ◽  
Vol 13 (4) ◽  
pp. 707-726
Author(s):  
Mohammad Selim
Keyword(s):  
Monetary Policy ◽  
Labor Productivity ◽  
Full Employment ◽  
Manufacturing Sector ◽  
Value Added ◽  
High Growth ◽  
Price Stability ◽  
Theoretical Ground ◽  
Content Type ◽  
The Impact

Purpose This paper aims to explore Istisna’a as a tool of monetary policy (MP) and examines its effectiveness in achieving full employment income and price stability. Design/methodology/approach This paper uses Istisna’a as a tool of MP and examines its effects on key macroeconomic variables on purely theoretical ground. The effectiveness and the impact of Istisna’a-based MP is examined by using aggregate output and aggregate expenditure model, embedded with Islamic economic principles, including zakat function. Findings Istisna’a-based MP immediately creates well paid jobs, positively contributes and expands the size of the manufacturing sector, increases capital per person employed, labor productivity and thus increases output, employment and promotes industrialization. Increase in the size of manufacturing sector will not only increase manufactured value-added exports but also cut high valued manufactured imports and thus increases positive trade balance and eventually reduces trade deficits. Increase in labor productivity will improve the standard of living, and eventually the economy will yield sustainable high growth rates, full employment and prosperity. Originality/value This is probably one of the first attempt to systematically develop the Istisna’a-based MP with detailed MP transmission mechanism. This new contribution in the field of Islamic MP will unveil the horizon of sustainable economic growth, creation of well paid jobs, expansion of manufacturing sector, rapid industrialization and the increase in capital per person employed across the economy, and eventually Istisna’a-based MP will be one of the most effective tool of MP for transforming an economy into a relatively higher and sophisticated stages which will eventually promote sustainable development.

Analysis of the Analytical Balance Sheet of Central Bank of Republic of Turkey During 2000 - 2009 Period in terms of Crises

2013 ◽  
pp. 110-127
Author(s):  
Yildiz Özkök
Keyword(s):  
Monetary Policy ◽  
Central Bank ◽  
Balance Sheet ◽  
Central Banks ◽  
Money Market ◽  
Price Stability ◽  
Primary Target ◽  
Monetary Aggregates ◽  
Analytical Balance ◽  
Republic Of Turkey

Today, Central Banks’ primary target is to maintain the price stability. In that context, through their monetary policy, they intervene in the money market with different tools. The Analytical Balance Sheet was created upon summing up and offsetting Balance Sheet of the Central Bank of Republic of Turkey (CBRT) in order to represent specific monetary aggregates. By means of that, CBRT aims to make the balance sheet more understandable and simple. In this chapter, firstly the sub items of the Analytical Balance Sheet are explained; secondly, the economic crises of Turkey during 2000-2009 is mentioned; finally, effects of these crises on the CBRT’s Analytical Balance Sheet, changes in monetary aggregates which are Currency Issued, Reserve Money, Monetary Base, and Central Bank’s Money, and in this context structure of the monetary policy of the CBRT in this period is analyzed.

Multi-Factor Portfolios: A New Factor? Limits of the Static Approach

2019 ◽  
Keyword(s):  
Predictive Power ◽  
Value Added ◽  
Point Of View ◽  
General Definition ◽  
Single Factor ◽  
Cross Sectional ◽  
The Us ◽  
Static Approach ◽  
Definition Of ◽  
Equal Weighting

We assess the value added of a multifactor portfolio from a performance-agnostic point of view. First we introduce a broad general definition of factor, that encompasses usual factors like Size or Value, and then we prove that static long–short multifactor strategies (as the equal weighting of factors) are indeed factors according to our definition. This result is new in the literature and states that, by investing in a long–short static multifactor strategy, one is indeed investing into a new (synthetic) factor. Finally we test the strength of such a synthetic factor compared to each single factor by looking at its predictive power. We empirically test the equal-weighting of Value, Size, Momentum and Low Volatility in the US and Europe. Our conclusion is very clear in both regions: the equal-weighting of these four standard factors is a synthetic factor that has no predictive power on stocks’ return, while each of the factors shows clear ability to distinguish among stocks. In other words, the measure that underlies this equal-weighting of factors has zero predictive power on cross-sectional differences in stocks’ returns.

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