Download - Goal of monetary policy
![Page 1: Goal of monetary policy](https://reader031.vdocument.in/reader031/viewer/2022030318/5a6d1ef07f8b9ab8418b5631/html5/thumbnails/1.jpg)
![Page 2: Goal of monetary policy](https://reader031.vdocument.in/reader031/viewer/2022030318/5a6d1ef07f8b9ab8418b5631/html5/thumbnails/2.jpg)
![Page 3: Goal of monetary policy](https://reader031.vdocument.in/reader031/viewer/2022030318/5a6d1ef07f8b9ab8418b5631/html5/thumbnails/3.jpg)
INTRODUCTION
BODY
CONCLUSION
Monetary Policy
The price stability goal
and the Nominal Anchor
![Page 4: Goal of monetary policy](https://reader031.vdocument.in/reader031/viewer/2022030318/5a6d1ef07f8b9ab8418b5631/html5/thumbnails/4.jpg)
![Page 5: Goal of monetary policy](https://reader031.vdocument.in/reader031/viewer/2022030318/5a6d1ef07f8b9ab8418b5631/html5/thumbnails/5.jpg)
• Monetary policy is the macroeconomic
policies which central banks made to
control and regulate the money supply to
the economy.
![Page 6: Goal of monetary policy](https://reader031.vdocument.in/reader031/viewer/2022030318/5a6d1ef07f8b9ab8418b5631/html5/thumbnails/6.jpg)
Expansionary policy
Contractionarypolicy
![Page 7: Goal of monetary policy](https://reader031.vdocument.in/reader031/viewer/2022030318/5a6d1ef07f8b9ab8418b5631/html5/thumbnails/7.jpg)
Expansionary policy
Contractionarypolicy
The money supply
The money supply
![Page 8: Goal of monetary policy](https://reader031.vdocument.in/reader031/viewer/2022030318/5a6d1ef07f8b9ab8418b5631/html5/thumbnails/8.jpg)
The money supply
Interest rates
Monetary policy is the process by which
the monetary authority of a country controls
the supply of money, often targeting a rate
of interest for the purpose of
promoting economic growth and stability.
![Page 9: Goal of monetary policy](https://reader031.vdocument.in/reader031/viewer/2022030318/5a6d1ef07f8b9ab8418b5631/html5/thumbnails/9.jpg)
Price Stability
Exchange rate Stability
Interest stability
Finance Market Stability
Economic growth
Reduce unemployment
![Page 10: Goal of monetary policy](https://reader031.vdocument.in/reader031/viewer/2022030318/5a6d1ef07f8b9ab8418b5631/html5/thumbnails/10.jpg)
![Page 11: Goal of monetary policy](https://reader031.vdocument.in/reader031/viewer/2022030318/5a6d1ef07f8b9ab8418b5631/html5/thumbnails/11.jpg)
1) Definition
Price stability = low and stable inflation
![Page 12: Goal of monetary policy](https://reader031.vdocument.in/reader031/viewer/2022030318/5a6d1ef07f8b9ab8418b5631/html5/thumbnails/12.jpg)
High Money value
Trust information
True decisions
Economic growth
![Page 13: Goal of monetary policy](https://reader031.vdocument.in/reader031/viewer/2022030318/5a6d1ef07f8b9ab8418b5631/html5/thumbnails/13.jpg)
Raising the productive potential of the economy.
![Page 14: Goal of monetary policy](https://reader031.vdocument.in/reader031/viewer/2022030318/5a6d1ef07f8b9ab8418b5631/html5/thumbnails/14.jpg)
Monetary policy can contribute to the allocative
efficiency of the capital market and thus increases the
incentives to invest
![Page 15: Goal of monetary policy](https://reader031.vdocument.in/reader031/viewer/2022030318/5a6d1ef07f8b9ab8418b5631/html5/thumbnails/15.jpg)
![Page 16: Goal of monetary policy](https://reader031.vdocument.in/reader031/viewer/2022030318/5a6d1ef07f8b9ab8418b5631/html5/thumbnails/16.jpg)
![Page 17: Goal of monetary policy](https://reader031.vdocument.in/reader031/viewer/2022030318/5a6d1ef07f8b9ab8418b5631/html5/thumbnails/17.jpg)
![Page 18: Goal of monetary policy](https://reader031.vdocument.in/reader031/viewer/2022030318/5a6d1ef07f8b9ab8418b5631/html5/thumbnails/18.jpg)
1) DefinitionNominal anchor = a nominal variable such as the
inflation rate or the money supply which ties down the
price level to achieve price stability.
![Page 19: Goal of monetary policy](https://reader031.vdocument.in/reader031/viewer/2022030318/5a6d1ef07f8b9ab8418b5631/html5/thumbnails/19.jpg)
2) The role of a Nominal Anchor
1• Maintain money value
2• Promote price stability
3
• Limit the time-inconsistency problem
![Page 20: Goal of monetary policy](https://reader031.vdocument.in/reader031/viewer/2022030318/5a6d1ef07f8b9ab8418b5631/html5/thumbnails/20.jpg)
1) DefinitionTime inconsistency problem is something we deal with
continually in everyday life. We often have a plan that we
know will produce a good outcome in the long run, but
when tomorrow comes , we just can’t help ourselves and
we renege on our plan, because doing so has short-run
gains.
![Page 21: Goal of monetary policy](https://reader031.vdocument.in/reader031/viewer/2022030318/5a6d1ef07f8b9ab8418b5631/html5/thumbnails/21.jpg)
Discretionary policy
Time-inconsistency
![Page 22: Goal of monetary policy](https://reader031.vdocument.in/reader031/viewer/2022030318/5a6d1ef07f8b9ab8418b5631/html5/thumbnails/22.jpg)
1
Even if a central
bank recognizes
that discretionary
policy will lead to
a poor outcome
2
It still may not be
able to pursue the
better policy of
inflation control
3
Because politicians
are likely to apply
pressure on the
central bank to try
to boost output
with overly
expansionary
monetary policy
![Page 23: Goal of monetary policy](https://reader031.vdocument.in/reader031/viewer/2022030318/5a6d1ef07f8b9ab8418b5631/html5/thumbnails/23.jpg)
A
nominal
anchor
A
true
policy
Method
![Page 24: Goal of monetary policy](https://reader031.vdocument.in/reader031/viewer/2022030318/5a6d1ef07f8b9ab8418b5631/html5/thumbnails/24.jpg)
Monetary policy: chính sách tiền tệ
Goal: mục tiêu
Price stability: ổn định giá
Regulation: quy tắc
Impact: tác động
Committee: ủy ban
Determine: xác định
Maintain: duy trì
Combat: chống lại
Expansionary policy: chính sách mở rộng
Contractionary policy: chính sách thắt chặt
![Page 25: Goal of monetary policy](https://reader031.vdocument.in/reader031/viewer/2022030318/5a6d1ef07f8b9ab8418b5631/html5/thumbnails/25.jpg)
Nominal anchor: neo danh nghĩa
Adherence: giữ vững
Narrow: hẹp
Discretionary policy: chính sách tùy ý (tùy nghi)
Pursue: theo đuổi
Expected constraint: giới hạn kỳ vọng
Time – inconsistency problem: vấn đề thời gian
không thống nhất
Recognize: nhận ra
Pressure: áp lực
![Page 26: Goal of monetary policy](https://reader031.vdocument.in/reader031/viewer/2022030318/5a6d1ef07f8b9ab8418b5631/html5/thumbnails/26.jpg)