Quote: "Monetary policy is the policy adopted by the monetary authority of a nation to affect monetary and other financial conditions to accomplish broader objectives like high employment and price stability..."
The use of the money supply and interest rates to influence the level of economic activity.
Central banking: The role and functions of central banks in the conduct of monetary policy, including the creation and control of money supply.
Inflation: Definition and measurement of inflation, causes of inflation, and the impact of inflation on economic growth and stability.
Interest rates: The role of interest rates in the economy, how they are set, and their relationship to monetary policy.
Exchange rates: The impact of exchange rates on the economy, how they are determined, and their relationship to monetary policy.
Macroeconomic Theory: The basic principles of macroeconomics, including aggregate demand and supply, fiscal and monetary policy, and the relationship between the price level and real output.
Fiscal Policy: The role of fiscal policy in the management of the economy, including government spending and taxation.
Financial Markets: The various types of financial markets, including money and capital markets, and the role of these markets in the economy.
Economic Indicators: The various economic indicators used to measure economic activity, including GDP, unemployment, and inflation.
Monetary Tools: The tools used by central banks to implement monetary policy, including open market operations, discount rates, and reserve requirements.
International Monetary Relations: The role of international organizations such as the IMF and World Bank in the management of the global economy, and the impact of international trade and finance on monetary policy.
Interest rate targeting: This involves targeting the interest rate on short-term government bonds to influence the availability and cost of credit.
Inflation targeting: This involves setting a target for inflation and using various tools to achieve that target over the medium term.
Exchange rate targeting: This involves targeting the exchange rate to stabilize it and promote economic growth.
Money supply targeting: This involves setting a target for the growth rate of money supply in the economy to control inflation.
Credit controls: This involves imposing restrictions on the amount of credit that banks and other financial institutions can lend to consumers and businesses.
Capital controls: This involves restricting the flow of capital in and out of a country to prevent sudden shocks to the economy.
Quantitative easing: This involves injecting liquidity into the financial system by purchasing assets such as government bonds or mortgage-backed securities.
Negative interest rates: This involves setting interest rates below zero to encourage spending and discourage saving.
Forward guidance: This involves signalling the future path of monetary policy to encourage investment and consumer spending.
Quote: "...to accomplish broader objectives like high employment and price stability (normally interpreted as a low and stable rate of inflation)."
Quote: "Further purposes of a monetary policy may be to contribute to economic stability or to maintain predictable exchange rates with other currencies."
Quote: "Today most central banks in developed countries conduct their monetary policy within an inflation targeting framework..."
Quote: "A third monetary policy strategy, targeting the money supply, was widely followed during the 1980s..."
Quote: "The tools of monetary policy vary from central bank to central bank..."
Quote: "Interest rate targeting is generally the primary tool..."
Quote: "Interest rates affect general economic activity and consequently employment and inflation..."
Quote: "Monetary policy affects the economy through financial channels like interest rates, exchange rates, and prices of financial assets."
Quote: "This is in contrast to fiscal policy, which relies on changes in taxation and government spending..."
Quote: "In developed countries, monetary policy is generally formed separately from fiscal policy..."
Quote: "Modern central banks in developed economies being independent of direct government control and directives."
Quote: "How best to conduct monetary policy is an active and debated research area..."
Quote: "Interest rates affect general economic activity and consequently employment and inflation via a number of different channels..."
Quote: "...indirectly via open market operations."
Quote: "Other policy tools include communication strategies like forward guidance..."
Quote: "Monetary policy is often referred to as being either expansionary (stimulating economic activity and consequently employment and inflation)..."
Quote: "Monetary policy is often referred to as being either contractionary (dampening economic activity, hence decreasing employment and inflation)..."
Quote: "...and are also an important determinant of the exchange rate."
Quote: "How best to conduct monetary policy is an active and debated research area, drawing on fields like monetary economics as well as other subfields within macroeconomics."