Search results
Results from the WOW.Com Content Network
The policy mix is the combination of a country's monetary policy and fiscal policy. These two channels influence features such as economic growth and employment, and are generally determined by the central bank and the government (e.g., the United States Congress) respectively. [1]
An easy money policy is a monetary policy that increases the money supply usually by lowering interest rates. [1] It occurs when a country's central bank decides to allow new cash flows into the banking system. Since interest rates are lower, it is easier for banks and lenders to loan money, thus likely leading to increased economic growth. [2]
In macroeconomics, a monetary conditions index (MCI) is an index number calculated from a linear combination of a small number of economy-wide financial variables deemed relevant for monetary policy. These variables always include a short-run interest rate and an exchange rate. [1]
Instruments of monetary policy have included short-term interest rates and bank reserves through the monetary base. [1]With the creation of the Bank of England in 1694, which acquired the responsibility to print notes and back them with gold, the idea of monetary policy as independent of executive action began to be established. [2]
Monetary policy affects stock prices, leading to changes in Tobin's q (the market value of firms divided by the replacement cost of capital) and investment [9] Wealth effects; Monetary policy affects stock prices, which affects financial wealth and consumption (consumer spending on nondurable goods and services) [12] Uncertainty channel
Price stability would be a good guide to monetary policy if we knew the effects of non-monetary factors on prices, the exact time lag of present monetary actions, and the size of the effects of present monetary actions. Therefore, he proposes monetary aggregates as a guide of monetary policy, because they are under direct control by the central ...
Afterward, a "draft plan" was announced. During this time, the main member presiding over this decision was Pierre Werner, Prime Minister of Luxembourg. [1] The decision to form the Economic and Monetary Union of the European Union (EMU) was accepted in December 1991, which later became part of the Maastricht Treaty (the Treaty on European ...
The monetary policy of the Federal Reserve changed throughout the 20th century. Taylor and others evaluate the period between the 1960s and the 1970s as a period of poor monetary policy; the later years are typically characterized as stagflation. The inflation rate was high and increasing, while interest rates were kept low. [6]