Chapter 16 All Materials PDF

Chapter 16 All Materials PDF - ECON 330: Money and Banking...

Info iconThis preview shows pages 1–4. Sign up to view the full content.

View Full Document Right Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: ECON 330: Money and Banking Fall 2007 Section 1: Tuesday and Thursday, 11:30AM-12:45PM, SMU 104 Section 2: Tuesday and Thursday, 5:00PM-6:15PM, SRO B Prof. J. Santos South Dakota State University Student Learning Objectives: Chapter 16: What Should Central Banks Do? Monetary Policy Goals, Strategy, and Tactics [1] De&ne, in the context of central banking, the term price stability. [2] Explain why price stability is increasingly viewed, by monetary economists, as the most important goal of monetary policy. [3] De&ne the term nominal anchor. [4] Explain, in the context of monetary policy, the so-called time-inconsistency problem. [5] List six goals of monetary policy and explain how an economy bene&ts when a central bank attains each. [6] De&ne and provide examples of hierarchical and dual mandates. [7] Identify which type of mandate is, according to most monetary economists, most likely to lead to time-inconsistent monetary policies. [8] Compare and contrast monetary versus ination targeting. [9] Identify the relative advantages and disadvantages of monetary versus ination targeting regimes. [10] Describe the current Federal Reserve monetary policy regime, which monetary economists often refer to as implicit nominal anchoring. [11] Identify one disadvantage of the Federal Reserves current monetary policy regime. [12] De&ne, in the context of monetary policy, the terms operating targets (which we also refer to as policy instruments) and intermediate targets. [13] Provide examples of each type of target. Chapter 16: What Should Central Banks Do? Monetary Policy Goals, Strategy, and Tactics Econ 330: Money and Banking all 007 Fall 2007 Prof. Joseph Santos Department of Economics South Dakota State University This outline draws from Frederic Mishkins Money, Banking and Financial Markets (2007) and, as such, contains copy written material. Please do not quote without proper citation. [1] Price Stability Economists define price stability as low and stable inflation. Economists increasingly view price stability as the most [1] Price Stability [2] Role of a Nominal Anchor [3] Time Inconsistency ] Goals of Monetary Policy important goal of monetary policy. Price stability is desirable because a rising or falling price level creates uncertainty in the economy, and that [4] Goals of Monetary Policy [5] The Primary Goal? [6] Hierarchical v. Dual Mandates [7] Three Policy Strategies uncertainty hampers economic growth. For example, when the overall level of prices is changing, the information conveyed by the prices of goods and services is harder to interpret; this complicates decision making for consumers, [8] Monetary Targeting [9] Inflation Targeting, Part 1 [10] Inflation Targeting, Part 2 [11] Inflation Targeting, Part 3 2] An Implicit Nominal businesses, and government, and thereby leads to a less efficient economic system....
View Full Document

Page1 / 15

Chapter 16 All Materials PDF - ECON 330: Money and Banking...

This preview shows document pages 1 - 4. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online