Monetary policy models: advantages and disadvantages and implementation in specific countries
Finansų kursinis darbas. Table of Content. Introduction. Monetary policy. Monetary Policy Goals. High Employment. Price stability. Appropriate exchange rate. Economic growth. Tools of monetary policy. Open market operations. Discount policy. Reserve requirements. Monetary policy models. Exchange-rate targeting. Advantages of exchange rate targeting. Disadvantages of exchange rate targeting. Inflation Targeting. Transparency, Communication, and Accountability under Inflation Targeting. Monetary Targeting. Reasons for Monetary Targeting. Price level targeting. Mixed model. Taylor rule. Implementation of the monetary policy models in different countries. China. Ethiopia. Bahrain. Summary. Literature. Appendix. Appendix. Appendix. Appendix.
Monetary policy is the country’s national bank’s activity through which it is trying to affect the economic growth, price, interest rate, inflation, exchange rate stability. The main models of monetary policy are inflation targeting, monetary targeting, exchange rate targeting and price level targeting. Country’s authority, depending on its monetary policy objective, chooses a certain strategy in order to meet it’s objectives. By employing the right monetary policy model and adjusting it to the economic needs, every country can achieve high results, prevent countries economy from the overheating and maintain steady and stable economic growth. The importance of this topic is very high, especially now, as the world is still trying to fight the Global Crisis and authorities of many countries are reviewing monetary policies in order to stabilize the economies.