The European Central Bank: the time is ripe for a major revision of its strategy

A revision of the European Central Bank's (ECB) strategy is urgently needed. For the new strategy, it is important to define the inflation target explicitly in symmetrical terms. Environmental policy objectives can in principle be reconciled with the ECB's mandate as long as they do not conflict with the objective of monetary stability. An essential element of any strategy is a heuristic that makes it relatively easy for the public to monitor whether monetary policy decisions are in line with the mandate. Among the possible heuristics, monetary targeting and the Taylor rule have to be ruled out while ‘inflation targeting’ offers a relatively simple navigation system for monetary policy discussions.

The Choice of Nominal Targets in an Open Economy

Monetary anchors play a central role in the practice of monetary policy in LFDCs. Not all LFDCs have an explicit monetary anchor, but if so they rely on three alternative frameworks: exchange rate targeting, monetary targeting, and inflation targeting. This chapter discusses, for each nominal anchor, the advantages, drawbacks, and prerequisites for adopting it, the modalities of implementing it, strictly or flexibly, and the various challenges it raises. The presentation combines theoretical arguments, discussions of empirical evidence, and analysis of selected experiences of LFDCs. The special case of anchors in dollarized economies is examined in depth. The chapter contains two appendices. The first deals with international reserves and their international borrowing arrangements. The second is a case study of monetary unions in sub-Saharan Africa.

GESTATIONAL SYPHILIS IN THE LOW AMAZON MESOREGION

Objective: This study aimed to outline the epidemiological profile of reported cases of gestational syphilis in five cities in the Lower Amazon mesoregion between 2008 and 2018. Materials and Methods: The study was descriptive, bibliographic, and retrospective with a quantitative approach. The variables used were sociodemographic and epidemiological and the data was made available by the Ministry of Health in line with the Department of Surveillance, Prevention and Control of Sexually Transmitted Infections (STDs, HIV / AIDS) and Viral Hepatitis. The collected data were tabulated and processed with the aid of Microsoft Excel® 2010 and Action 2.8 software. Results: When characterizing the epidemiological profile, 949 reported cases of gestational syphilis were observed and the city of Santarém lead with 540 notifications. The age group between 20 and 29 years (52.6%), the race/color “Parda” (815), Incomplete Elementary School (42.7%) and the clinical classification of “Primary Syphilis” (465) predominated in all five cities. The prevailing gestational age was the “third trimester” and the treatment regimen adopted was Penicillin. Furthermore, the absence of some variables makes it difficult to build an epidemiological profile and efficient monetary targeting. Conclusion: Finally, this study can contribute to decisions by public agencies responsible for health care, as well as, instigate research in this region, in an attempt to grant more visibility to existing health problems, especially in the Amazonian interiors.

Tunisia Monetary Policy Since the Arab Spring

In this paper, we argue that inflation targeting could be the future of Tunisia’s monetary policy. Monetary targeting has proven to be ineffective due to the composition of reserve money, structural liquidity deficit, and higher instability of the money multiplier after 2010. Exchange rate targeting is no longer feasible due to the level of international reserves, current account deficit, and inflation differentials with main trading partners. The Central Bank of Tunisia has already made important progress toward inflation targeting. The paper evidences the existence of increasingly effective interest rate transmission as well as the changing exchange rate passthrough to inflation with the gradual move toward further exchange rate flexibility.

Monetary Policy, Trade Openness and Economic Growth in India Under Monetary-targeting and Multiple-indicator Approach Regimes

This article examines the role of monetary policy and trade openness to raise income in India for the monetary-targeting regime and the multiple-indicator approach regime of monetary policy. The impact of the key instruments of monetary policy, namely, money supply, interest rate and exchange rate, with trade openness on income, is assessed. Besides, how interest rate responds to monetary instruments, income and trade openness is studied. Empirical analysis finds a significant positive impact of the broad money supply, both in the short run and the long run, along with a negative long-run impact of the real interest rate and a positive impact of the real effective exchange rate in the variations of income. On the other hand, trade openness contributes to a rise in income in the short run, while its impact on the long run is negative. The interest rate has also responded to policy instruments, income and openness which indicates that the monetary policy is effective over the two monetary regimes.

Openness, Inflation and Output Under Alternative Monetary Policies: A Structuralist Approach

This article theoretically revisits the issue of how trade openness and inflation are interconnected in the light of conduct and optimal design of monetary policy. Central banks in open economies all over the world face a problematic dilemma when it comes to providing a nominal anchor to the economy in the sense that they have to choose between monetary targeting and inflation targeting. The experience has been varied worldwide with respect to these alternative policies in containing inflation. Different dimensions of openness like fully flexible exchange rate and capital mobility have also had significant impacts on the outcomes of policy changes. In this paper, we have constructed two theoretical open macro-economy models using the AD-AS framework under regressive expectations. The first model considers interest-rate targeting incorporating Taylor rule, whereas the second one deals with monetary targeting. The models show that alternate monetary policy rules do not change the basic results of different macroeconomic policies, although the underlying transmission mechanisms are quite different. JEL Codes: E12, E31, E43, E52, F41

Monetarism’s “renaissance”: How the well-known theorylived in 2000-2018

The classical monetarism passed away. However it was substituted by a new school that rose in 2005-2010 under the name of “new” monetarism. The new direction is rather young and its area of influence is limited to modeling. Several ideas of “old” monetarism are used in the practice of monetary policy: for example, monetary policy rules, monetary targeting in developing economies and using of money as an economic variable in the monetary analysis. Some important principles of monetarism have remained in the modern macroeconomic analysis. In particular, price stability is the ultimate, but not unique goal of any central bank. The public commitment of the central bank is the key for confidence to monetary policy. Monetary policy (but not fiscal policy) is considered as the main tool of short-term macroeconomic stabilization.

The odyssey of inflation targeting: To new challenges of monetary policy

What has happened to inflation targeting after a quarter of the century? The popular regime of monetary policy has experienced considerable changes. Central banks of developed economies received the double mandate; there were elements of monetary targeting, there was departure from an interest rate as the main instrument of monetary policy; innovations in communication policy are devoted to the disclosure of the forecast of future interest rate and alternative inflation estimates. There are deviations of the actual inflation from an inflation target, de facto moving from inflation targeting to hybrid regimes, and manipulation of inflation target in developing economies.