Alt+MP+-+F11 - Alternative Alternative Monetary Policy...

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Unformatted text preview: Alternative Alternative Monetary Policy Monetary Policy Methodology Methodology Central Bank Goals Central Bank Goals • Federal Reserve System • The Board of Governors of the Federal Reserve System and the Federal Open Market Committee shall maintain long run growth of the monetary and credit aggregates commensurate with the economy's long run potential to increase production, so as to promote effectively the goals of maximum employment, stable prices, and moderate long-term interest rates. • Bank of Korea • People’ s Bank of China • European Central Bank • Bank of England • Bank of Sweden • Bank of Mexico • Bank of Canada Eco 301 - Fall 2011 Nick Noble Alternative Monetary Policy 2 Ben Bernanke Ben Bernanke How should governments and central banks use monetary policy to create a healthy economy? Traditionally, policymakers have used such strategies as controlling the growth of the money supply or pegging the exchange rate to a stable currency. In recent years a promising new approach has emerged: publicly announcing and pursuing specific targets for the rate of inflation. This book is an in-depth study of inflation targeting. Combining penetrating theoretical analysis Combining penetrating theoretical analysis with detailed empirical studies of countries with detailed empirical studies of countries where inflation targeting has been adopted, where inflation targeting has been adopted, the authors show that the strategy has clear the authors show that the strategy has clear advantages over traditional policies. advantages over traditional policies. They argue that the U.S. Federal Reserve and the European Central Bank should adopt this strategy, and they make specific proposals for doing so....
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This note was uploaded on 12/15/2011 for the course ECO 301 taught by Professor Sungu during the Fall '10 term at Miami University.

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Alt+MP+-+F11 - Alternative Alternative Monetary Policy...

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