scholarly journals Monetary Economics Overview Includes Monetary Policy Instruments, Functions and Impacts

2020 ◽  
Vol 1 (2) ◽  
pp. 20-26
Author(s):  
Drogaba Immanuel ◽  
Essiena Yayamo
Keyword(s):  
Monetary Policy ◽  
Policy Instruments ◽  
Monetary Economics ◽  
Investment Climate ◽  
State Spending ◽  
Currency Exchange ◽  
Precautionary Motive ◽  
Market Factors ◽  
The Stability ◽  
Opening Up

This study discusses monetary policy, the function and impact of monetary policy as well as the factors that influence the money supply. Monetary policy is a policy or regulation issued by the Central Bank which is used to manage a number of money supplies in a country to be able to create a specific purpose. The functions and impacts of monetary policy include maintaining an investment climate that occurs within the country, increasing the stability of economic growth in a country, overcoming high levels of unemployment and opening up a number of large employment opportunities, increasing the number of the balance of payments, maintaining the stability of value. the existing currency exchange is able to maintain a number of stability of the price of goods on the market. Factors that affect the amount of money circulating in society include the size of state spending, the fast and slow rate of money circulation, the motive for having cash, the transaction motive, the precautionary motive, and the speculative motive.

scholarly journals Wpływ kryzysu gospodarczego na potencjalne członkostwo Polski w trzecim etapie Unii Gospodarczej i Walutowej

2011 ◽  
pp. 31-53
Author(s):  
Joanna Stryjek
Keyword(s):  
Monetary Policy ◽  
Interest Rates ◽  
Economic Crisis ◽  
Budget Deficit ◽  
Substantial Reduction ◽  
Policy Instruments ◽  
Point Of View ◽  
Convergence Criteria ◽  
Convergence Programme ◽  
The Stability

The continuous uncertainty concerning the final consequences of the economic crisis in the Eurozone, as well as the level of recession in Poland, increase the risk of introducing the common currency and giving up the monetary policy instruments. However, the Polish economy and the economy of the Eurozone are so much interrelated that an emergence of a deep recession in the EMU which would be able to sidestep Poland is hardly probable. Hence, the influence of the current economic crisis on the Polish membership in the Eurozone should be analyzed mainly from the point of view of Poland's ability to ful%ll the convergence criteria under the economic slowdown. Such an analysis is the aim of this article. The biggest challenge for Poland is a substantial reduction in the budget deficit. In 2010 the budget deficit in Poland - instead of decreasing (as it was planned in the Polish "Convergence Programme") - continued to increase. Growing budget deficit means an increase in the public debt. Furthermore, the inability to fulfill the fiscal criterion leads to the serious problems concerning the other convergence criteria (that is, the level of nominal interest rates and the stability of the exchange rate). Moreover, under such circumstances it would be dificult for the fiscal policy to play the role of so-called stabilizer if Poland decided to enter ERM II (and such a role would be very helpful regarding the limited autonomy of the monetary policy).

scholarly journals Demand for Real Money Balances by the Business Sector: An Econometric Investigation

2000 ◽  
Vol 39 (4II) ◽  
pp. 857-873
Author(s):  
Abdul Qayyum
Keyword(s):  
Monetary Policy ◽  
Money Supply ◽  
Policy Instruments ◽  
Monetary Economics ◽  
Business Sector ◽  
Crucial Importance ◽  
Demand For Money ◽  
Real Money

Monetary economics provides one of the important tools, that is monetary policy, to deal with the macroeconomic problems of the economy. It is concerned with the supply of money and the demand for money. It is often assumed that the money supply is exogenously determined by the authorities and the demand for real money is determined by the market. The demand for money is of crucial importance in the conduct of monetary policy. It helps to understand macroeconomic activities and to prescribe appropriate policy instruments to deal with macroeconomic problems. The effectiveness of the monetary policy, however, depends on the shape and stability of the estimated demand for money function.

scholarly journals Powrót do przedkryzysowej polityki pieniężnej a stabilność systemu finansowego

2017 ◽  
pp. 190-200
Author(s):  
Ilona Skibińska-Fabrowska
Keyword(s):  
Monetary Policy ◽  
Central Bank ◽  
Interest Rates ◽  
Balance Sheet ◽  
Policy Instruments ◽  
Central Banks ◽  
Financial Assets ◽  
Negative Effects ◽  
The Stability

Faced with the financial crisis in 2008, the central banks used conventional monetary policy instruments. However, the problem of zero lower bond forced them to use unconventional monetary policy instruments - quantitative easing carried out as part of the so-called central bank balance sheet politics and relying on the buying by the central bank of di&erent kinds of financial assets - resulting in stabilization of the situation on financial markets in conditions of low long-term interest rates. Balance sheet totals of the central banks rose repeatedly. Their structure also changed. At present possible effects for the stability of the financial system of the return to the pre-crisis monetary policy are the topic of debate. The exit strategy is giving rise to a significant risks and the coordination of economic policy and the transparency of action taken by monetary authorities can only minimize possible negative effects

scholarly journals Aspects of influence of monetary policy on dynamics of agro-industrial com-plex development

2020 ◽  
Vol 22 (96) ◽  
pp. 3-8
Author(s):  
P. M. Muzyka ◽  
B. B. Brychka ◽  
L. V. Honcharenko
Keyword(s):  
Monetary Policy ◽  
Interest Rates ◽  
Agricultural Products ◽  
National Currency ◽  
Price Stability ◽  
Industrial Complex ◽  
Agricultural Enterprises ◽  
Currency Exchange ◽  
Currency Exchange Rate ◽  
The Stability

The main approaches to the interpretation of the essence of monetary policy arepresented in the article, as well as the author’s definition are substantiated. The author highlights the main characteristics of monetary policy, in particular its target orientation, specific time horizon, the presence of a clear mechanism of monetary policy, as well as the coordinated and balanced using of a set of monetary instruments to achieve each goal. In addition, the components of the stability of the currency are substantiated, which includes price stability, stability of interest rates, as well as the stability of the national currency exchange rate. The influence of each of the components of the currency stability on the dynamics of agro-industrial complex development is substantiated. First of all, price stability ensures stable income from the sale of agro-industrial products in the domestic market. In this case, the dynamics of real earnings of agricultural enterprises will depend on changes in relative prices. Stability of interest rates is important in terms of incentives for agricultural enterprises to obtain additional credit resources. The impact of the stability of the national currency exchange rate on development of agro-industrial complex can be traced in two directions. First of all, agricultural enterprises are interested in stable exchnage rate of hryvnia due to the import of mineral fertilizers, seeds, feed additives, foreign equipment for the production and processing of agricultural products, agricultural machinery, etc. Devaluation of the hryvnia during the period of import purchases of necessary raw materials provokes a future increase in the cost of agricultural products. At the same time, agricultural enterprises are interested in a certain devaluation of the hryvnia, which will stimulate the export of agricultural products and ensure the stability of incomes in the national currency.

scholarly journals EFEKTIVITAS QUANTUM CHANNEL DALAM MEKANISME TRANSMIS! KEBIJAKAN MONETER: STUDI KASUS INDONESIA TAHUN 1993 -2005

2007 ◽  
Vol 7 (2) ◽  
pp. 179-198
Author(s):  
Fajar Bambang Hirawan
Keyword(s):  
Economic Growth ◽  
Monetary Policy ◽  
Quantum Channel ◽  
Asset Price ◽  
Monetary Economics ◽  
Transmission Mechanism ◽  
Credit Channel ◽  
New Thought ◽  
Crisis Period ◽  
The Stability

In the year 2002, Y. V Reddy introduced a new thought in monetary economics theory, especially about transmission mechanism of monetary policy. Reddy classified the channeIs of transmission mechanism into three types, there are quantum channel, interest rate channel, and asset price channel. Quantum channel consists of two channels, there are money channel and credit channel. This research will examine the differences between money channel and credit channeI, the factors which affect volume of money supply (M2) and credit, the stability of quantum channel, and also effectiveness of quantum channel, especially related on its role to push the economic growth. This research uses a monthly data from the year 1993 until 2005. The analysis of this research divided into three parts of period, pre-crisis period (1993-1996), crisis period (19972OO1), and post-crisis period (2002-2005). In the precrisis period, credit channel more stable in transmission mechanism of monetary policy and more effective to push the economic growth. In the crisis, quantum channel did not effective to push economic growth. In the post-crisis period quantum channel also did not effective to push the economic growth.

ANALISIS PENGARUH ERUBAHAN TINGKAT SUKU BUNGA SBI DAN PERUBAHAN KURS US$ TERHADAP HARGA PASAR SAHAM SEMEN GRESIK, TBK PERIODE JANUARI 2002 – DESEMBER 2006

2017 ◽  
Vol 4 (1) ◽  
Author(s):  
Oktafalia Marisa ◽  
Maya Syafriana
Keyword(s):  
Monetary Policy ◽  
Exchange Rate ◽  
Cash Flow ◽  
Stock Price ◽  
External Factors ◽  
Investment Climate ◽  
Internal Factors ◽  
Price Fluctuation ◽  
Two Factors ◽  
Investment Behaviour

<p class="Pendahuluan">Investment climate has begun to rise since a few years ago. Stock price fluctuations keep stable and move to the positive position. Stock price fluctuation affected by two factors, internal factors and external factors. Internal factors consist of company’s cash flow, dividend and investment behaviour. External factors consist of monetary policy, exchange rate, interest volatility, globalization, companies’ competition, and technology. This research, try to find out the effects of SBI rate and exchanged rate (USD/Rp) to PT. Semen Gresik’s stock price.</p><p class="Pendahuluan"> </p><p class="Pendahuluan">Keywords : Investment, stock price, SBI’s rate, and Exchanged rate.</p>

scholarly journals On the Limits of Macroprudential Policy

2020 ◽  
Vol 0 (0) ◽  
Author(s):  
Marcin Kolasa
Keyword(s):  
Monetary Policy ◽  
Policy Instruments ◽  
New Keynesian ◽  
Output Volatility ◽  
Macroprudential Policy ◽  
Collateral Constraints ◽  
Keynesian Model ◽  
Additional Stabilization ◽  
The Interest Rate

AbstractThis paper studies how macroprudential policy tools applied to the housing market can complement the interest rate-based monetary policy in achieving one additional stabilization objective, defined as keeping either economic activity or credit at some exogenous (and possibly time-varying) levels. We show analytically in a canonical New Keynesian model with housing and collateral constraints that using the loan-to-value (LTV) ratio, tax on credit or tax on property as additional policy instruments does not resolve the inflation-output volatility tradeoff. Perfect targeting of inflation and credit with monetary and macroprudential policy is possible only if the role of housing debt in the economy is sufficiently small. The identified limits to the considered policies are related to their predominantly intertemporal impact on decisions made by financially constrained agents, making them poor complements to monetary policy, which also operates at an intertemporal margin. These limits can be overcome if macroprudential policy is instead designed such that it sufficiently redistributes income between savers and borrowers.

scholarly journals A RECONSIDERATION OF THE DOCTRINAL FOUNDATIONS OF MONETARY POLICY RULES: FISHER VERSUS CHICAGO

2021 ◽  
Vol 43 (1) ◽  
pp. 55-82
Author(s):  
George S. Tavlas
Keyword(s):  
Monetary Policy ◽  
Price Level ◽  
Policy Instruments ◽  
Policy Instrument ◽  
Superior Performance ◽  
Policy Uncertainty ◽  
Direct Link ◽  
Policy Rule ◽  
Policy Rules ◽  
Monetary Policy Rules

There has long been a presumption that the price-level stabilization frameworks of Irving Fisher and Chicagoans Henry Simons and Lloyd Mints were essentially equivalent. I show that there were subtle, but important, differences in the rationales underlying the policies of Fisher and the Chicagoans. Fisher’s framework involved substantial discretion in the setting of the policy instruments; for the Chicagoans the objective of a policy rule was to tie the hands of the authorities in order to reduce discretion and, thus, monetary policy uncertainty. In contrast to Fisher, the Chicagoans provided assessments of the workings of alternative rules, assessed various criteria—including simplicity and reduction of political pressures—in the specification of rules, and concluded that rules would provide superior performance compared with discretion. Each of these characteristics provided a direct link to the rules-based framework of Milton Friedman. Like Friedman’s framework, Simons’s preferred rule targeted a policy instrument.

scholarly journals Money Decentralization under Direct Democracy Procedures. The Case of Classical Athens

2021 ◽  
Vol 14 (1) ◽  
pp. 30
Author(s):  
Emmanouil-Marios L. Economou ◽  
Nicholas C. Kyriazis ◽  
Nikolaos A. Kyriazis
Keyword(s):  
Monetary Policy ◽  
Central Bank ◽  
Direct Democracy ◽  
Hellenistic Period ◽  
International Currency ◽  
Monetary System ◽  
Mediterranean World ◽  
The Stability ◽  
City State

By analyzing the case of Athens during the Classical period (508-323 BCE) the main thesis of this paper is that under direct democracy procedures and the related institutional setup, a monetary system without a Central Bank may function relatively well. We focus on the following issues: (i) Τhe procedures of currency issuing in the Athenian city-state, (ii) why the Athenian drachma become the leading international currency in the Mediterranean world (iii) how and towards which targets monetary policy without a Central Bank was possible (iv) defining the targets of monetary policy and the mechanisms for its implementation (v) the role of money in the economy (vi) the issue of deficit spending (vii) the reasons of the replacement of the Athenian drachma as a leading currency by others from the Hellenistic period onwards (viii) the correlation of our findings regarding the decentralized character of monetary policy in Classical Athens to today’s realities, such as the issue of cryptocurrencies. Our analysis shows that monetary policy without a Central Bank was possible, with its foremost aim being the stability of the currency (mainly, silver coins) in order to enhance trust in it and so, make it an international currency which could outcompete other currencies. Since there was no Central Bank like today, monetary policy decisions were taken by the popular assembly of citizens in combination with the market forces themselves.

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