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1
Sobarna, Nanang. "KEBIJAKAN MONETER DALAM EKONOMI ISLAM." Jurnal Co Management 2, no. 1 (August 20, 2020): 175–82. http://dx.doi.org/10.32670/comanagement.v2i1.165.
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The monetary management of conventional economy which revolves around bank interest uses multiplier money rather than high powered money. Consequently, its instrument of monetary policies tends to the utility of open market operation and change of discount rate. Both instruments cannot be applied in an Islamic monetary system which is free from interest whose monetary management relies on controlling high powered money by applying profit and loss sharing and financial intermediation. Therefore, Islamic monetary system can employ alternative instruments of monetary policy such as quantitative control of credit allocation and realization of socio-economic objectives. The first instrument is backed up with monetary instruments such as statutory reserve requirement, credit ceiling, government deposits, common pool, moral suasion, equity-base instrument. Whereas the second instruments include some monetary instruments such as treating the created money as fai’ and goal oriented allocation of credit.
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Goodhart, Cae. "Instruments and objectives of monetary policy." Law and Financial Markets Review 7, no. 5 (September 30, 2013): 235–38. http://dx.doi.org/10.5235/17521440.7.5.235.
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Thornton, Saranna R. "Suitable policy instruments for monetary rules." Journal of Economics and Business 50, no. 4 (July 1998): 379–97. http://dx.doi.org/10.1016/s0148-6195(98)00010-1.
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Duarte, Cristiano Boaventura. "Alternative Monetary Targets, Instruments and Future Monetary Policy Frameworks." Review of Political Economy 31, no. 4 (October 2, 2019): 582–601. http://dx.doi.org/10.1080/09538259.2020.1730606.
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Kagazbaeva, E. M., and М. К. Axakalova. "Қытайдың монетарлық саясаты: Қазақстан үшін тәжірибе." BULLETIN of the L.N. Gumilyov Eurasian National University.Political Science. Regional Studies. Oriental Studies. Turkology Series. 138, no. 1 (2022): 68–78. http://dx.doi.org/10.32523/2616-6887/2022-138-1-68-78.
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This article analyzes the monetary policy of the Central Bank of China and the impact of its individual instruments on economic growth. The economic and political problems affecting the monetary policy of Kazakhstan are considered. The purpose of the scientific article is to identify the features of the monetary mechanism for the development of the Chinese economy, to study innovative tools of China’s monetary policy, and to develop practical recommendations for improving the monetary policy of the Republic of Kazakhstan. China does not seek to copy global trends in monetary policy, but makes decisions related to current needs, assessing the situation in the country. Currently, the Central Bank of China conducts an independent monetary policy and uses a number of classic and modern tools to implement it. Along with general scientific methods, both comparative and statistical methods were used in this study. To analyze the studied characteristics, statistics of the main monetary policy instruments, analytical reports of the International Monetary Fund and the Central Bank of the People’s Republic of China, as well as scientific articles on the development of China’s monetary policy were used. According to the author, the combination of traditional and innovative instruments in China’s monetary policy, as well as the generally positive experience of developing China, is necessary to improve the mechanisms of monetary policy in Kazakhstan. The experience of reforms in China shows that the state has become successful due to the fact that in its policy the state relies on the best practices of developed countries, taking into account the patterns of historical formation and development. A less developed society cannot function and develop according to the laws of a more developed society. Kazakhstan is invited to study and adopt China’s best practices in conducting monetary policy: developing the real sector of the economy and stimulating economic growth; maintaining the stability of the national currency; maintaining inflation at the level necessary for the sustainable functioning of the economic system.
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DOGAN, Burhan, and Yasin ALTIN. "Reserve Option Mechanism from Monetary Policy Instruments Being Implemented in Turkey." International Journal of Science and Research (IJSR) 11, no. 2 (February 5, 2022): 991–1000. http://dx.doi.org/10.21275/sr22217020330.
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Fetisov, G. "Russian Monetary Policy: Objectives, Instruments, and Rules." Voprosy Ekonomiki, no. 11 (November 20, 2008): 4–24. http://dx.doi.org/10.32609/0042-8736-2008-11-4-24.
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The article gives full treatment to monetary policy problems which are essential for the transition of the Russian economy to innovation-based development. The necessity for achieving all monetary policy objectives, instead of reducing them to inflation targeting, is justified. Systemic and structural approach to providing promotional monetary policy is suggested. The elaborated package of monetary policy tools allows ensuring higher efficiency of innovation-based economic development. Reasons for the relevance of the Central Bank of Russia discount rate decrease are given. Some general conclusions are drawn about new experience of governmental regulation under the conditions of the world financial crisis.
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Massaka, Antonio, Pitshu. "Monetary Policy Its Instruments and Convergence of Its Objectives: Case of Angola 2005/2017." Journal of Economics and Public Finance 5, no. 2 (April 11, 2019): 161. http://dx.doi.org/10.22158/jepf.v5n2p161.
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<p><em>This paper proposes a new paradigm for the analysis of monetary policy, and presents the monetary policy framework in Angola which includes the policy instruments, and implementation mechanism the way between instrument and objective.<strong> </strong>To study the Monetary Policy instruments in Angola based on a multiple linear regression model. Before the model was conceived an analogy was made about the politics and instruments of monetary policy from the classical Keynesian model in the matter, but also less important also to analyze the concrete objective of monetary policy if the authors agree connected with those currents of economic thought. For the estimation of the equation for the monetary aggregate M2 that represents the money supply by the Central Bank in Angola The author applied the current implementation and the existing theories to display the Angola monetary tools such as basic interest rate for monetary policy orientation (tbna), open market operation, Lending Facility, coefficient of required reserve, net international reserves, and the Gross Domestic Product, the reference oil price to brent. Most of the variables present the expected results.</em></p>
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ZIA UR REHMAN, ASAD KHAN, SHER ALI KHAN, and SHAH RAZA KHAN. "Monetary Policy, Fiscal Policy and Capital Structure." Journal of Business & Tourism 4, no. 2 (November 7, 2021): 77–85. http://dx.doi.org/10.34260/jbt.v4i2.163.
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Instruments of monetary and fiscal policy are beyond the control of the management but they do influence the short-term as well as long-term decision making of the firm. Empirical studies with respect to their effect on financing decisions of the firm are somewhat under researched particularly in the context of developing countries. The aim of the study was to analyse the effect of these instruments on the financing decisions of the non-financial firms listed on PSX for the period 2008-2015. Fixed effect model was used to analyse the effect of instruments of monetary policy and fiscal policy on the financing decisions of firms. Based on sample of 338 firms, the findings of the study revealed that instruments of monetary policy and fiscal policy do influence the financing decisions of the firm. M2, tax revenue and government debt has a significant effect on the debt ratio of listed firms whereas real interest rate is insignificantly related. Moreover, the relationship between real interest rate, M2 and tax revenue and debt ratio is negative whereas in case of government debt it is positive.
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Shapran, Vitaliy. "Monetary incentives and fiscal policy mutual influence." VUZF Review 6, no. 4 (December 27, 2021): 180–86. http://dx.doi.org/10.38188/2534-9228.21.4.21.
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The article considers the problems and practice of using the tools of monetary and fiscal stimulation of the economy. The main problems of the application of monetary instruments in practice in emerging markets are identified. The author paid special attention to the definition of classical monetary policy instruments and their role in economic growth in emerging markets. Critical assessment of the role of monetary policy instruments in stimulating economic growth is based on the practice of central banks in emerging markets. Recommendations for the analysis of the efficiency of monetary transmission are given. Problems of efficiency of application of fiscal stimulus instruments in emerging markets are raised. The mechanisms of the dependence between fiscal and monetary policies and the strengthening of such dependence in the case of a significant informal sector of the economy and an underdeveloped financial market are demonstrated. The author not only points out the need for coordination in choosing between monetary and fiscal policy but also advocates the idea of having an independent arbitrator between monetary and fiscal authorities in developing countries. The article also focuses on the analyzing algorithm of the use of monetary policy instruments for economic growth effectiveness. The conclusions made in the article will be especially useful for those who are interested in the issue of optimal choice between monetary and fiscal instruments to stimulate economic development in emerging markets.
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Immanuel, Drogaba, and Essiena Yayamo. "Monetary Economics Overview Includes Monetary Policy Instruments, Functions and Impacts." Journal Dimensie Management and Public Sector 1, no. 2 (December 23, 2020): 20–26. http://dx.doi.org/10.48173/jdmps.v1i2.50.
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This study discusses monetary policy, the function and impact of monetary policy as well as the factors that influence the money supply. Monetary policy is a policy or regulation issued by the Central Bank which is used to manage a number of money supplies in a country to be able to create a specific purpose. The functions and impacts of monetary policy include maintaining an investment climate that occurs within the country, increasing the stability of economic growth in a country, overcoming high levels of unemployment and opening up a number of large employment opportunities, increasing the number of the balance of payments, maintaining the stability of value. the existing currency exchange is able to maintain a number of stability of the price of goods on the market. Factors that affect the amount of money circulating in society include the size of state spending, the fast and slow rate of money circulation, the motive for having cash, the transaction motive, the precautionary motive, and the speculative motive.
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Bidabad, Bijan. "Islamic Monetary Policy and Rastin Swap Bonds." International Journal of Islamic Banking and Finance Research 3, no. 2 (May 25, 2019): 1–16. http://dx.doi.org/10.46281/ijibfr.v3i2.269.
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Purpose: This paper aims to examine monetary instruments in Islamic central banking framework. As a conclusion, to revive Islamic monetary policy, we should provide some public equity-based instrument as a necessary replacement for conventional bonds and treasury bills to activate non-usury open market operations.
Design: We define a type of new negotiable bond as: “Rastin Swap Bonds (RSBs)”, which is based on swapping money between two persons for two different periods.
Findings: RSB is a financial paper that observes the right for the lender to borrow an equal amount to his lending from the borrower. Four types of RSBs in domestic money and foreign currency are defined, and their Sharia allowances and monetary, fiscal, and financial effects are evaluated.
Research limitations: This bond is a novel design, and it is required to be more elaborated for further practical development and adjustment.
Practical implications: Islamic central banking is not different from conventional central banking as a whole, but the role of an Islamic central bank in conducting monetary policy is restricted to use interest-free monetary instruments in an environment that commercial banks are obliged to implement non-usury banking operations.
Social implications: Islamic financial instruments should be usury-free and efficient in applying monetary, fiscal, and financial policies at different levels of the central bank, government and commercial banks and non-banking money and financial institutions. Rastin Swap Bond will serve as an important instrument for resource mobilization and will be a primary vehicle for the development of the Islamic capital market and central banking operations.
Originality/value: Conventional interest-bearing bonds are not allowed in Islamic central banking. This restriction mostly distinguishes Islamic central banking from the conventional one in implementing monetary policy.
Article Type: Technical paper
JEL: G21, G28, H81
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Wang, Gang, and Yucheng Jiang. "Monetary Policy Effects on the Stock Market in China: Comparing Two Restriction Schemes in the SVAR Model." Review of Pacific Basin Financial Markets and Policies 23, no. 04 (October 27, 2020): 2050033. http://dx.doi.org/10.1142/s0219091520500332.
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This paper analyzes and compares the effects of the monetary policy on the stock price in China based on SVAR models with two different restriction schemes. As suggested by existing literature, there are four major monetary policy instruments used by the People’s Bank of China. They are the seven-day repo rate, the one-year benchmark lending rate, the M2, and the total loan. We run SVARs with the monetary policy instrument, the stock index, and the macroeconomic variables and show the impulse responses of the stock index to the monetary policy shocks. After comparing two restriction schemes, the short-run Cholesky restrictions and the short-run and long-run combined restrictions for identification, we conclude that the latter restriction method leads to better estimation than the former one. In general, a contractionary monetary policy shock lowers the stock price, appreciates the Chinese currency, reduces the output gap, injects deflation, and shrinks the commodity price gap. We find that the benchmark lending rate is more effective in regulating the Chinese stock market than the other monetary policy instruments. In addition, a combination of price-based and quantity-based monetary policy instruments is suggested for impacting the stock market and stabilizing the economy in China.
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Geng, Zhongyuan, and Xue Zhai. "Monetary Policy Instruments and Bank Risks in China." International Journal of Asian Business and Information Management 4, no. 2 (April 2013): 57–71. http://dx.doi.org/10.4018/jabim.2013040105.
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The authors use a panel data regression model to examine the effects of main monetary policy instruments on commercial bank risks in China from 1998 to 2011. The interest rate has a positive effect on bank risk while the interest rate margin, the reserve requirement ratio and open market operation have a negative effect. Among the three monetary policy instruments, the reserve requirement ratio has the greatest effect on bank risk, the interest rate (the interest rate margin) the second largest and the open market operation the weakest. Their findings provide guidance to the monetary authority and regulatory authorities in monetary policy and banking regulation in China.
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Miranda-Agrippino, Silvia, and Giovanni Ricco. "The Transmission of Monetary Policy Shocks." American Economic Journal: Macroeconomics 13, no. 3 (July 1, 2021): 74–107. http://dx.doi.org/10.1257/mac.20180124.
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Commonly used instruments for the identification of monetary policy disturbances are likely to combine the true policy shock with information about the state of the economy due to the information disclosed through the policy action. We show that this signaling effect of monetary policy can give rise to the empirical puzzles reported in the literature, and propose a new high-frequency instrument for monetary policy shocks that accounts for informational rigidities. We find that a monetary tightening is unequivocally contractionary, with deterioration of domestic demand, labor and credit market conditions as well as of asset prices and agents’ expectations. (JEL D82, D84, E32, E43, E52, E58, G12)
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ARNAUDO, ALDO A. "Monetary Policy in Argentina Under Convertibility, 1991-96." Brazilian Journal of Political Economy 20, no. 1 (March 2000): 35–51. http://dx.doi.org/10.1590/0101-31572000-1066.
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ABSTRACT A conceptual framework to analyze monetary policy might be the relationship “policy goal-operating target-monetary instrument.” Although the discretion of the monetary authorities is severely restricted, this analysis is also applicable to Argentina since 1991. Its monetary regime is governed by the Convertibility Law, which requires the Central Bank to convert the domestic currency into dollars, and by the Central Bank Charter, which prescribes that its “fundamental mission [...] is [...] to maintain the value of the currency.” Five periods were found when the operating targets and monetary instruments were different, while the policy goal of price stability remained unchanged.
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Hui, George W. L. "Optimal Monetary Instruments and International Policy Coordination." Canadian Journal of Economics 29 (April 1996): S198. http://dx.doi.org/10.2307/135986.
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Baliño, Tomás J. T., Jakob Horder, and David S. Hoelscher. "Evolution of Monetary Policy Instruments in Russia." IMF Working Papers 97, no. 180 (1997): 1. http://dx.doi.org/10.5089/9781451859072.001.
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Calliari, S., C. Carraro, and D. Sartore. "Intermediate targets and instruments of monetary policy." Journal of Economic Dynamics and Control 10, no. 1-2 (June 1986): 175–84. http://dx.doi.org/10.1016/0165-1889(86)90036-9.
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Marattin, Luigi, Massimiliano Marzo, and Paolo Zagaglia. "Distortionary tax instruments and implementable monetary policy." International Review of Economics & Finance 25 (January 2013): 219–43. http://dx.doi.org/10.1016/j.iref.2012.07.006.
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Shahin, Wassim N. "Unorganized loan markets and monetary policy instruments." World Development 18, no. 2 (February 1990): 325–32. http://dx.doi.org/10.1016/0305-750x(90)90056-4.
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Bayar, Omer. "Weak instruments and estimated monetary policy rules." Journal of Macroeconomics 58 (December 2018): 308–17. http://dx.doi.org/10.1016/j.jmacro.2018.10.004.
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Danylyshyn, Bohdan, Maksym Dubyna, Maksym Zabashtanskyi, Natalia Ostrovska, Kateryna Blishchuk, and Ivanna Kozak. "Innovative Instruments of Monetary and Fiscal Policy." Universal Journal of Accounting and Finance 9, no. 6 (December 2021): 1213–21. http://dx.doi.org/10.13189/ujaf.2021.090601.
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Fahr, Stephan, and John Fell. "Macroprudential policy – closing the financial stability gap." Journal of Financial Regulation and Compliance 25, no. 4 (November 13, 2017): 334–59. http://dx.doi.org/10.1108/jfrc-03-2017-0037.
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Purpose The global financial crisis demonstrated that monetary policy alone cannot ensure both price and financial stability. According to the Tinbergen (1952) rule, there was a gap in the policymakers’ toolkit for safeguarding financial stability, as the number of available policy instruments was insufficient relative to the number of policy objectives. That gap is now being closed through the creation of new macroprudential policy instruments. Both monetary policy and macroprudential policy have the capacity to influence both price and financial stability objectives. This paper develops a framework for determining how best to assign instruments to objectives. Design/methodology/approach Using a simplified New-Keynesian model, the authors examine two sets of policy trade-offs, the first concerning the relative effectiveness of monetary and macroprudential policy instruments in achieving price and financial stability objectives and the second concerning trade-offs between macroprudential policy instruments themselves. Findings This model shows that regardless of whether the objective is to enhance financial system resilience or to moderate the financial cycle, macroprudential policies are more effective than monetary policy. Likewise, monetary policy is more effective than macroprudential policy in achieving price stability. According to the Mundell (1962) principle of effective market classification, this implies that macroprudential policy instruments should be paired with financial stability objectives, and monetary policy instruments should be paired with the price stability objective. The authors also find a trade-off between the two sets of macroprudential policy instruments, which indicates that failure to moderate the financial cycle would require greater financial system resilience. Originality/value The main contribution of the paper is to establish – with the help of a model framework – the relative effectiveness of monetary and macroprudential policies in achieving price and financial stability objectives. By so doing, it provides a rationale for macroprudential policy and it shows how macroprudential policy can unburden monetary policy in leaning against the wind of financial imbalances.
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Martin, Vesna. "Monetary Policy Analysis in Serbia." Journal of Central Banking Theory and Practice 4, no. 3 (September 1, 2015): 147–80. http://dx.doi.org/10.1515/jcbtp-2015-0016.
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Abstract The paper focuses on analysing monetary policy in Serbia. The National Bank of Serbia chose inflation targeting, which sets price stability as the main objective of monetary policy. To achieve this goal, the central bank uses different monetary policy instruments which analysis can provide us with the understanding of the main directions of their actions but also of the limitations of its application. Only through improvement of both instruments and monetary policy the central bank will create a better foundation for achieving monetary stability. In addition, the implementation of exchange rate policy is entrusted to the National Bank of Serbia, as the main regulator of the financial system. A mere use of managed floating exchange rate, as the chosen exchange rate regime, is an appropriate solution in the current economic circumstances and in accordance with the desired objective of monetary policy.
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Khalidin, Bismi. "MONETARY POLICY IN AN ISLAMIC ECONOMICS." International Journal of Research -GRANTHAALAYAH 9, no. 5 (June 10, 2021): 315–26. http://dx.doi.org/10.29121/granthaalayah.v9.i5.2021.3948.
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The primary aim of this paper is to elucidate the general concept of monetary policy under Islamic Economics. Not only does the stability of but also the growth of the economy in a country strongly depends upon monetary policy implemented. Such the phenomenon also prevails in Islamic Economics in which the term is also ruled by the Holy Quran and the Hadith of the Prophet. Moreover, the Prophet issued some regulations regarding monetary, such as to adopt Dinars and as the Islamic currencies. It is noted that, however, the thing distinguishing between Islamic Economics and other economic systems the variable of interest or usury, where either the Holy Quran or the Hadith clearly states that it is banned. Due to using interest as the yardstick, the conventional monetary instruments such as Open Market Operation, Discount Rate and the likes are not considered as the monetary instruments under Islamic Economics. Therefore, Instead of interest, Islamic Economics adopts Profit Loss Sharing (PLS) system, regarded as the important part of monetary policy. Moreover, Islamic Economics has also its specific monetary standard and instruments, which are far from interest or variables, such as certificates and others.
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Pasichnyi, Mykola. "Fiscal and monetary instruments of impact on economic development." University Economic Bulletin, no. 48 (March 30, 2021): 215–24. http://dx.doi.org/10.31470/2306-546x-2021-48-215-224.
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The research subject includes the theoretical basis and mechanism of fiscal and monetary policy coordination. The study aims to justify the conceptual basis of fiscal- monetary policy interactions to ensure economic development. Methods. To achieve the appropriate tasks, we used a set of methods and approaches that helped ensure our investigation's conceptual unity. The systemic and structural approaches, analysis and synthesis methods, comparison, generalization, modeling, and scientific abstraction are applied. Results. In this paper, we improved the theoretical and methodological foundations of fiscal and monetary policy coordination. The author highlighted the necessity to use the institutional approach in that case. Also, we gave practical proposals to develop the system for assessing the effectiveness of the coordination of fiscal and monetary policy. Practical implications. Government economic policy and instruments of its implementation. Conclusions. Empirical experience has shown the advisability of fiscal and monetary policy coordination to ensure sustainable endogenous economic growth. Coordination of government financial policy measures in the context of the economic cycle stages should be based on an institutional approach. The interaction of fiscal and monetary policies should focus on increasing social welfare and the maintenance of long-term macroeconomic stability. The adaptive interaction of monetary and fiscal mechanisms and the improvement of the state's economic system's institutional architectonics contribute to the intensification of business entities' economic activity. Meanwhile, those factors positively influence on economy's competitiveness. The necessity of introducing a system for assessing the effectiveness of the coordination of fiscal and monetary policy determines effective measures of financial regulation at a certain stage of economic development.
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Vüqar qızı Salmanova, Sevda. "The nature of the money-credit system implemented by central banks." SCIENTIFIC WORK 76, no. 3 (March 18, 2022): 158–62. http://dx.doi.org/10.36719/2663-4619/76/158-162.
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Monetar siyasət pul-kredit orqanlarının makroiqtisadi siyasətini, qiymət sabitliyini, sabit valyuta məzənnəsinin saxlanmasını əhatə edə bilən son məqsədlərin kombinasiyasına nail olmaq üçün pul bazarının şərtləri (qısamüddətli faiz dərəcəsi, nominal məzənnə və ya bankın cari likvidlik səviyyəsi) vasitəsilə məcmu tələbin idarə edilməsinə yönəlmiş tədbirlər məcmusudur. Monetar siyasətin əsasını pul resurslarının və ümumilikdə pul siyasətinin iqtisadi situasiyaya təsiri prosesini öyrənən pul nəzəriyyəsi təşkil edir. İqtisadçılar uzun müddətdir ki, pul siyasətinin bazar şərtlərində əhəmiyyətini və rolunu müzakirə edirlər. Hədəflər və alətlər arasında düzgün tarazlığı qorumaq üçün mərkəzi banklar bir real hədəf götürür və ona nail olmaq üçün bir və ya bir neçə alət seçirlər. Mərkəzi Bank bankların koordinasiyasını təşkil etmək və iqtisadi tənzimləmə vasitəsi ilə onların fəaliyyətini tənzimləmək üçün xüsusi səlahiyyətlərə malikdir. Açar sözlər: pul-kredit, mərkəzi bank, inflyasiya, iqtisadi vəziyyət, monetar siyasət Sevda VugarSalmanova The nature of the money-credit system implemented by central banks Summary Monetary policy is a set of measures aimed at managing aggregate demand through money market conditions (short-term interest rate, nominal exchange rate or current bank liquidity level) to achieve a combination of ultimate goals that can include macroeconomic policy, price stability, and maintaining a stable exchange rate. The basis of monetary policy is the theory of money, which studies the process of the impact of monetary resources and monetary policy in general on the economic situation. Economists have long debated the importance and role of monetary policy in market conditions. To maintain the right balance between goals and instruments, central banks take a realistic goal and select one or more instruments to achieve it. The Central Bank has special powers to coordinate banks and regulate their activities through economic regulation. Keywords: monetary, central bank, inflation, economic situation, monetary policy
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Narullah, Aan. "Sistem Moneter Islam: Menuju Kesejahteraan Hakiki." HUNAFA: Jurnal Studia Islamika 13, no. 2 (January 3, 2017): 272. http://dx.doi.org/10.24239/jsi.v13i2.440.272-287.
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The Studies in this article aims to look at how the efforts of the Islamic monetary system in creating the true welfare. Welfare in the conventional economic system (capitalist and socialist) contain of different meanings, when in the conventional economic system, welfare is defined only in terms of materials (material fulfillment), but in the Islamic economic system, welfare contains of broader meaning, the fulfillment of material and immaterial. As Islamic monetary strategy that prohibit sto use of interest, the Islamic monetary instrument does too. The Islamic monetary policy instrument is divided into three mazhab based on the period and the community needs at that time. The first mazhab is the instrument that introduced by mazhab iqtisoduna is Promissory Notes or Bill of Exchange kind of paper to get fresh funds. The second madzhab is the mainstream instruments mazhab that used Dues of Idle Fund is policy instrument that is charged on all assets which are idle. The third mazhab is the alternative monetary system that advocated of Syuratiq Process. It is where a policy that taken by the monetary authorities is based on discussion prior with the real sector. Which is the main characteristic of the Islamic monetary system in its policy instruments are not leaving the ideology of Islamic economics nor throw needs of economic returns for economic players, namely profit sharing. Then it is expected satisfy the human need for material and immaterial, so the true welfare can be achieved
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Affandi, Yoga. "THE OPTIMAL MONETARY POLICY INSTRUMENTS: THE CASE OF INDONESIA." Buletin Ekonomi Moneter dan Perbankan 5, no. 3 (October 11, 2003): 56–70. http://dx.doi.org/10.21098/bemp.v5i3.313.
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In 1999, the central bank of Indonesia, Bank Indonesia, gained its independence. The new Central Bank Act has established a more explicit foundation for Bank Indonesia’s independence. Firstly, goal independence, in which Bank Indonesia sets its own monetary target. Secondly, instrument independence, in which Bank Indonesia implements various policy instruments to achieve that target. The primary objective of Bank Indonesia (henceforth BI) is to achieve and maintain price stability reflected in a low and stable inflation rate.
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Furtula, Srđan, and Milan Kostić. "Key Policy Rate as the Main or Additional Instrument of Inflation Targeting Strategy in Serbia." Economic Themes 55, no. 2 (June 27, 2017): 143–59. http://dx.doi.org/10.1515/ethemes-2017-0009.
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AbstractIn achieving price stability as the primary objective of monetary policy, the National Bank of Serbia uses the key policy rate as the main instrument of monetary policy, while other instruments have a supporting role - contribute to a smooth transmission of the key policy rate on the market, as well as the development of financial markets. However, because the conditions in which economic and financial system of the Republic of Serbia works, transmission mechanism of monetary policy is conducted mainly through the exchange rate channel, while the channel of interest rates almost did not work. The great impact the exchange rate channel is determined by the great influence of the single currency euro and the ECB on our country. Therefore, the aim of this paper is to analyse the efficiency of the key policy rate as a monetary policy instrument, because in recent years the primary instrument receives a secondary character in the monetary regulation.
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Sourigna, Maliny, Shuzhen Zhu, and Atsara Chanthavieng. "The Study of Monetary Policy Instruments and Implementation Challenge in Laos." International Journal of Economics and Finance 10, no. 2 (January 30, 2018): 169. http://dx.doi.org/10.5539/ijef.v10n2p169.
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The monetary policies have been developed and implemented by the Bank of Lao PDR (BOL). This article presents the monetary policy framework in Laos which includes the policy instruments and implementation mechanism. The author applied the actual implementation and the existing theories to display the Lao monetary tools such as interest rate, open market operation, reserve ratio, exchange rate, credit control, cash flow management and relevant regulations. As well as the policy implementation mechanism has been presented in policy decision, operation department and operation mechanism.The author applies the descriptive analysis on the monetary policy implementation challenge and addressing. They based on monetary policy theories, literature studied, and practical experience from the operation authority. The analysis has found the challenges as The limited of market operation; the dollarization and multiples currencies consumer preference; the challenge in Kip prices, and Kip lending; the foreign capital outflow. Then, the analysis moved forward to the challenge addressing. All of these measures are taken to maintain the efficient management of the monetary system, ensure an effectiveness of the monetary policy implementation in the long-term.
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Olisah, Remigius. "MONETARY AND FISCAL POLICY COORDINATION IN NIGERIA." Social Science and Law Journal of Policy Review and Development Strategies 8, no. 1 (November 8, 2021): 116–32. http://dx.doi.org/10.48028/iiprds/ssljprds.v8.i1.09.
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This paper seeks to examine monetary and fiscal policy coordination in Nigeria. It discussed monetary policy as expansionary or contractionary, showing the various tools of monetary policy instruments in the country. Data are generated from secondary sources and evaluated through content analysis. The study is anchored by the Monetarist theory of inflation. Various literature examined shows that with declining oil prices and production challenges in an oil-dependent economy, achieving the growth projection requires better coordination of fiscal and monetary policies in a way that supports the non-oil sector. The government must develop and strengthen effective monetary and fiscal policy using appropriate instruments and international best practices.
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Afanasyeva, Oxana Nikolaevna. "Monetary policy instruments and the achievement of three macroeconomic goals in the USA and Japan." Финансы и управление, no. 2 (February 2022): 1–14. http://dx.doi.org/10.25136/2409-7802.2022.2.37788.
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Currently, the issues of the implementation of monetary policy, the use of its tools to achieve economic growth and other macroeconomic goals are particularly relevant. It is of great importance to identify the results of using various transmission channels in achieving the main macroeconomic targets. The use of monetary policy instruments can have both a stabilizing character and the opposite of what is expected, which must be taken into account when implementing monetary policy.The purpose of the study is to select monetary policy instruments to influence the achievement of such macroeconomic goals as: GDP growth, inflation, unemployment in the United States and Japan. The study develops the principle of "goals-tools" in relation to monetary policy. The possibility of achieving three macroeconomic goals simultaneously is being considered. В The methodology of the study is represented by the theory of economic policy of Ya. Tinbergen. To assess the possibility of achieving three macroeconomic goals simultaneously (GDP growth, inflation, unemployment rate) in the USA and Japan due to changes in the use of monetary policy instruments, the toolkit of a system of independent equations has been implemented. The overall result of the study is to determine the impact of monetary policy instruments in order to achieve a combination of three macroeconomic goals in the United States and Japan. The analysis of the countries presented showed that each of them has a specific impact of instruments, even with a similar impact, its strength differs in different countries, which must be taken into account when using the same type of monetary policy instruments to achieve macroeconomic goals.
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Syah, Toufan Aldian. "Penerapan Suku Bunga Bank Indonesia sebagai Instrumen Utama Kebijakan Moneter di Indonesia Perspektif Ekonomi Islam ala Syafruddin Prawiranegara." IQTISHADIA Jurnal Ekonomi & Perbankan Syariah 7, no. 2 (November 16, 2020): 111–25. http://dx.doi.org/10.19105/iqtishadia.v7i2.3487.
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Monetary policy is a factor that greatly determines the economic conditions of a country. Because it is very closely related to various things of economic activity in the efforts to achieve economic development that provides welfare for the community. This paper seeks to analyze the mechanisms of monetary instruments in Indonesia. Second, look at the extent of the implementation of monetary policy mechanisms in Indonesia by using Bank Indonesia Interest Rates. Third, the views of one of the Islamic economic leaders namely Sjafrudin Prawiranegara regarding the prohibition of the use of interest rates in Islam. Based on the analysis and discussion described above, the researcher concludes that the mechanism of interest rate-based monetary policy instruments in Indonesia remains the main instrument in controlling the country's economics and cannot be directly considered contrary to Islamic principles.
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Koroviy, V. V. "The Main Instruments of the State’s Monetary Policy." Business Inform 9, no. 500 (2019): 230–38. http://dx.doi.org/10.32983/2222-4459-2019-9-230-238.
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OKUR, Fatih, and Özgür Bayram SOYLU. "EFFECT OF MONETARY POLICY INSTRUMENTS ON SHADOW BANKING." Business & Management Studies: An International Journal 8, no. 3 (September 25, 2020): 2531–45. http://dx.doi.org/10.15295/bmij.v8i3.1442.
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Shadow banks are financial mediators. There are maturity, credit, and liquidity transformation without access to central bank liquidity and public sector credit guarantees in their performance. The principle purpose of this study is to answer the question of the relationship between shadow banking and monetary policy, all financial activities that require a private or public payment guarantee other than traditional banking. This study analyses the short and long-term effects of national income, policy rate, CPI and money supply (M1) on shadow banking by using Panel ARDL method in selected ten countries throughout 2002-2016. The findings of the analysis point out that there is a short- and significant long-term relationship between the indicators discussed. Short-term PMG estimation results indicate that the long-term equilibrium will be reached over for approximately four years. Also, long-term PMG estimation results also pointed to the existence of a significant relationship between indicators, apart from national income. It is determined that the money supply and policy interest rate had a positive relation and the consumer price index had a negative relation with shadow banking.
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Bhattacharyya, Indranil, and Rudra Sensarma. "Signalling Instruments of Monetary Policy: The Indian Experience." Journal of Quantitative Economics 3, no. 2 (July 2005): 180–96. http://dx.doi.org/10.1007/bf03404632.
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Akar, Cüneyt, and Serkan Çiçek. "“New” monetary policy instruments and exchange rate volatility." Empirica 43, no. 1 (April 11, 2015): 141–65. http://dx.doi.org/10.1007/s10663-015-9298-y.
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Lewis, Vivien. "OPTIMAL MONETARY POLICY AND FIRM ENTRY." Macroeconomic Dynamics 17, no. 8 (August 30, 2012): 1687–710. http://dx.doi.org/10.1017/s1365100512000272.
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This paper characterizes optimal monetary policy in an economy with endogenous firm entry, a cash-in-advance constraint, and preset wages. Firms must make profits to cover entry costs; thus the markup on goods prices is efficient. However, because leisure is not priced at a markup, the consumption–leisure trade-off is distorted. Consequently, the real wage, hours, and production are suboptimally low. Because of the labor requirement for entry, insufficient labor supply also implies that entry is too low. This paper shows that in the absence of fiscal instruments such as labor income subsidies, the optimal monetary policy achieves higher welfare under sticky wages than under flexible wages. The policy maker uses the money supply instrument to raise the real wage—the cost of leisure—above its flexible-wage level, in response to expansionary shocks to productivity and entry costs. This increases labor supply, expanding production and firm entry.
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Bannikova, V. A., and A. A. Pestova. "The effects of monetary shocks on inflation: High-frequency approach." Voprosy Ekonomiki, no. 6 (June 10, 2021): 47–76. http://dx.doi.org/10.32609/0042-8736-2021-6-47-76.
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Commonly used in monetary VARs identification schemes yield to a highfrequency approach as they tend to raise different empirical puzzles reported in the literature. However, financial markets in some open economies are not sufficiently liquid to provide minute bars data on interest rate financial instruments. This paper fills this gap employing a new series of high-frequency monetary policy surprises with USD/RUB currency futures and spot instruments. We find that a monetary tightening is contractionary without price puzzle and other paradoxes about financial variables. This result is robust for the period 2010—2019 apart from the crisis of 2014—2015 when the free floated ruble was devalued due to the sharp decline in oil prices. We also decompose surprises on monetary policy shocks — changes in the expected interest rate, and an information component — the information simultaneously conveyed by the central bank like an assessment of the economic outlook. We find that the former one significantly affects monetary policy surprises that does not confirm a hypothesis about substantial impact of non-monetary news on the external instrument.
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Hossain, Tafajul, and Biswajit Maitra. "Monetary Policy, Trade Openness and Economic Growth in India Under Monetary-targeting and Multiple-indicator Approach Regimes." Arthaniti: Journal of Economic Theory and Practice 19, no. 1 (July 4, 2019): 108–24. http://dx.doi.org/10.1177/0976747919852859.
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This article examines the role of monetary policy and trade openness to raise income in India for the monetary-targeting regime and the multiple-indicator approach regime of monetary policy. The impact of the key instruments of monetary policy, namely, money supply, interest rate and exchange rate, with trade openness on income, is assessed. Besides, how interest rate responds to monetary instruments, income and trade openness is studied. Empirical analysis finds a significant positive impact of the broad money supply, both in the short run and the long run, along with a negative long-run impact of the real interest rate and a positive impact of the real effective exchange rate in the variations of income. On the other hand, trade openness contributes to a rise in income in the short run, while its impact on the long run is negative. The interest rate has also responded to policy instruments, income and openness which indicates that the monetary policy is effective over the two monetary regimes.
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Nikitishin, Andrіy. "Influence of monetary policy on the modern mechanisms of tax regulation." University Economic Bulletin, no. 41 (March 30, 2019): 195–202. http://dx.doi.org/10.31470/2306-546x-2019-41-195-202.
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This study examines theoretical and applied problems of the influence of monetary policy on the modern mechanisms of tax regulation. The goal of the study is to determine the connection between the instruments, channels, mechanisms and regimes of the monetary policy of the National Bank of Ukraine and the instruments and mechanisms of the tax regulation, their monetary transmission influence on the budget architectonics. Methods of the study. In order to achieve the goals specified in the academic article a systemic approach has been used to determine the connection between the instruments, channels, mechanisms and regimes of the monetary policy of the National Bank of Ukraine and the instruments and mechanisms of the tax regulation, their monetary transmission influence on the profitable part of the state and local budgets of the country. Study results: the study has shown the influence of instruments of the monetary policy of the National Bank of Ukraine (official exchange rate, bank rate), emission channel of the national currency of Ukraine, organization mechanism of cash and noncash money turnover and the regime of inflation targeting on the tax regulation mechanisms (planning, forecasting, accounting, control, administration) and their elements (taxpayers, taxation basis, tax rates, process of tax calculation, tax payment procedure) which on the whole determine their influence on the budget architectonics (correlation of the profitable part of the state and local budgets) over a short period of time through the mechanism of impulse transmission. Application area of results: organizing and conducting scientific research and ensuring the coordination in the sphere of tax, budget and monetary policy. Conclusion. The results of the study show that the monetary policy of the National Bank of Ukraine, by implementing monetary transmission mechanism as a process of transmitting changes in the use of its instruments, has a significant influence on certain mechanisms and elements of the tax regulation at the first stage of its implementation, and at the second stage the changes in the tax regulation are introduced into the budget regulation and influence the budget architectonics. The whole correlation between the profitable part of the state and the local budgets is the result of influence of the totality of instruments, channels, mechanisms and regimes of the monetary policy of the National Bank of Ukraine on the instruments and mechanisms of the tax regulation at the first stage of implementation of the monetary transmission mechanism.
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Akalpler, Ergin, and Dilgash Duhok. "Does monetary policy affect economic growth: evidence from Malaysia." Journal of Economic and Administrative Sciences 34, no. 1 (May 8, 2018): 2–20. http://dx.doi.org/10.1108/jeas-03-2017-0013.
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Purpose The purpose of this paper is to investigate the relationship between monetary policy and economic growth in the light of a developing economy, with the main focus on Malaysia. Primarily, the research will concentrate on the interactions between interest rates, inflation, money supply and growth in GDP, which will serve as the instrument for measuring economic growth. Design/methodology/approach The research will apply quantitative analysis to determine the relationship between GDP growth and monetary policy instruments, particularly interest rate, money supply and level of inflation. Given the advancement and achievement in econometric analysis and computer software creation, the least-squares estimates analysis will be used to investigate the relationship and significance between these variables. Findings It is observed that relationship between economic growth and inflation is positive. This entails that a 1 percent change in inflation will result in a 77 percent increase in the level of economic growth in this economy. The linkage between economic growth and interest rates has also been observed to be positive. A positive nexus can be observed between economic growth and money supply. The coefficient value of 0.02 for money supply growth shows that it has the smallest effect on economic growth amongst the variables tested in the model. Research limitations/implications Based on the findings of this study, the following recommendations can be made, which could serve as policies instruments for Malaysian economic development. This does not mean that the findings can be generalized for other developing economies. Practical implications Observations from the test for economic application significance are based on the signs of the parameters. It was observed that inflation, interest rates and money supply all have a positive relationship with economic growth, which is in line with the a priori expectations. This means that monetary policy has positively affected the economic growth. Social implications The results of the OLS analysis reveal that the monetary policy instruments used for the model demonstrated that monetary policy has a positive relationship with economic growth in Malaysia. A breakdown of the individual monetary policy instruments shows that the interest rate, inflation and money supply all have individual positive relationships with economic growth. Originality/value A positive relationship exists between economic growth in Malaysia and all selected monetary instruments, namely, inflation, money supply and interest rate. The results show that the results show that inflation, interest rate and money supply will cause the economy to grow but their contribution to the developments is affected from other policy instruments which are used by the governments.
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Obeid, Rami, and Bassam Awad. "Effectiveness of Monetary Policy Instruments on Economic Growth in Jordan Using Vector Error Correction Model." International Journal of Economics and Finance 9, no. 11 (October 23, 2017): 194. http://dx.doi.org/10.5539/ijef.v9n11p194.
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The global financial crisis emphasized the important role of the prudent monetary policy in supporting economic growth through maintaining price stability. The monetary policy operational framework that was designed in 2008 was updated to include more instruments for managing monetary policy learning from the crisis lessons. Several studies analyzed various dimensions related to economic growth in Jordan such as Abdul-Khaliq, Soufan, and Abu Shihab (2013) and Assaf (2014), there were no studies that investigated the effect of monetary policy on economic growth in Jordan, at least recently, however. The study aims at measuring the effect of monetary policy instruments on the performance of Jordanian economy. Using quarterly data covering the period (2005-2015), an econometric model was examined using Vector Error Correction Model to assess the impact of monetary policy instruments on economic growth. The foremost advantage of VECM is that it has a nice interpretation of long-term and short-term equations. The results showed the existence of positive long-term and short-term effects of monetary policy instruments on the growth of real GDP. The model included three monetary policy instruments besides money supply. They are required reserve ratio, rediscount rate and overnight interbank loan rates as independent variables, and the real GDP growth as a dependent variable. The stationarity of the model time series was addressed. In addition, the stability of the model was tested using stability diagnostics tools. The results showed also an existence of inverse relationship between rediscount rate and economic growth in Jordan over both long and short terms.
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N. Kallianiotis, Dr Ioannis. "Can Monetary Policy Prevent Financial Crises?" International Journal of Economics and Financial Research, no. 64 (April 25, 2020): 51–75. http://dx.doi.org/10.32861/ijefr.64.51.75.
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Monetary policy is an important public policy, but it is not the only one to stabilize our economy and reduce its business cycles. The leading central bank, the Federal Reserve of the U.S., has introduced, after the 2008 global financial crisis, new instruments and unusual facilities to implement its new innovative monetary policy. The financial world and mostly the social scientists watch as the Federal Open Market Committee (FOMC) decides on a target interest rate in the federal funds market for the next period. The framework that the FOMC uses to implement monetary policy has changed over the last twelve years and continues to evolve today. Here, we try to evaluate the new instruments and their “effectiveness”. Before the 2008 financial crisis, policymakers used one set of traditional instruments (tools) to achieve the target rate. However, several policy interventions, introduced soon after the crisis, drastically altered the landscape of the federal funds market and the traditional economic theory. This new and uncertain environment, with enormous reserves and even interest on reserves, necessitated a new set of instruments by the Fed for its monetary policy implementation. Lately, after seven years of zero interest rate, the FOMC began in December 2015 to increase the target rate and then, went back again to a lower one, but many questions arise. How did they evaluate the effectiveness of these new instruments? Is the current federal funds rate the appropriate one for our economic wellbeing? How efficient was so far this ZIR monetary policy after the latest global financial crisis? Why the Fed put all these burdens of its ‘innovated” new monetary policy to the poor taxpayers (bail out) and to the risk-averse depositors (bail in)? Is it possible for the Fed’s policy to prevent the future financial crises? The federal funds rate was very low and affected negatively the financial markets (bubbles were growing), the real rates of interest (it is negative for twelve years), and the deposit rates (they are closed to zero for twelve years). The redistribution of wealth of depositors and taxpayers continues, which means the true economic welfare is falling and a new global recession was in preparation, if the current unfair easy money policy will persist, ignoring the necessity of a prevention of financial crises. Then, it came as an unexpected plague the coronavirus pandemic, following with a new but, the worse in economic history global crisis (chaos).
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Milošević, Andriana, and Mirjana Jemović. "Non-Standard Measures of the Monetary Policy – Mechanism for Overcoming Problems in the Implementation of the Neoliberal Concept of Monetary Policy During a Financial Crisis." Economic Themes 55, no. 4 (December 1, 2017): 465–80. http://dx.doi.org/10.1515/ethemes-2017-0026.
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AbstractAfter multiple decreases in the reference interest rate and its reaching zero bounds in certain countries during the recent global financial crisis, central banks in developed countries have started applying non-standard measures of monetary policy. This does not refer to introducing new monetary policy instruments, but rather to a certain relativisation within the framework of standard instruments, in terms of maturity of liquidity provision, collateral policy and counterparties. Therefore, the aim of this paper is to examine the role of non-standard measures of monetary policy as a mechanism for overcoming problems in the implementation of the neoliberal concept of monetary policy in the conditions of the financial crisis. The answer to this question is rather sensitive, considering the fact that the neoliberal concept was supported by the most developed countries, that is, in fact, their central banks were using non-standard instruments of monetary policy for the greatest part.
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Pasichnyi, Mykola. "Monetary policy under economic transformation in Ukraine." University Economic Bulletin, no. 43 (November 20, 2019): 173–84. http://dx.doi.org/10.31470/2306-546x-2019-43-173-184.
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The research subject includes the theoretical basis and mechanisms of monetary policy formation and realization as an instrument of macroeconomic regulation. The aim of the study is to determine the features of domestic monetary policy and to systemize the policy’s stages under economic transformations. Methods. In order to achieve the appropriate tasks, we used a set of methods and approaches, that helped to ensure the conceptual unity of our investigation. The dialectical, systemic and structural approaches, methods of analysis and synthesis, comparison, generalization, scientific abstraction are applied. Results. The peculiarities of formation and realization of monetary policy of Ukraine under economic transformations are determined. The main stages of national monetary policy’s development are systemized. The dynamics of monetization, exchange rate and index of consumer price from 1992 to 2018 is investigated. Practical implications. Monetaryl policy and instruments of its implementation. Conclusions. Nowadays, the monetary policy has a formed institutional mechanism in order to reach the main goal and tasks. We identified the main phases of monetary policy of Ukraine. In the initial stage the main elements of monetary architectonics are established, also the powers and tasks of central bank are defined. The stage of functional improvement characterized by the restriction on central bank repayment of bonds on the primary market, decreasing the monetization of national economy, introducing the currency exchange corridor. At the steady development phase, we determined the exchange rate stability and gradual increasing of monetization level. Within the transitional stage of modification, the raising of monetization was continued, moreover, the combined using of methods on the currency market was carried out to stabilize it. Also, National bank defined the priority directions to enhance the bank system. The stage of institutional modernization is characterized by the monetary strategy formation, increasing the central bank institutional and financial independence, the adoption of inflation targeting regime, the improving of basic statements of currency transaction, the developing of macroprudential regulation to ensure financial stability.
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Hayat, Zafar, and Muhammad Nadim Hanif. "Assessing the Role of Money versus Interest Rate in Pakistan." Pakistan Development Review 59, no. 1 (July 9, 2020): 101–14. http://dx.doi.org/10.30541/v59i1pp.101-114.
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We have empirically examined the role of monetary aggregate(s) vis-à-vis short-term interest rate as monetary policy instruments, and the impact of State Bank of Pakistan’s transformation into the latter on their relative effectiveness in terms of inflation in Pakistan. Using indicators of ‘persistent changes’ in the underlying behaviours of variables of interest, we found that broad money consistently explains inflation in (i) monetary (ii) transitory and (iii) interest rate regimes. Though its role has receded while moving from the transition to the interest rate regime, the interest rate instrument seems to be positively related to inflation, a phenomenon commonly known as price puzzle. In light of these findings, we recommend that the role of money should not be completely de-emphasised. JEL Classification: E31, E52. Keywords: Monetary Policy Instruments, Price Puzzle, ARDL, Pakistan
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Hu, Xiaowen, Chengchen Hu, Zhixiang Tang, and Zhen Li. "Modeling the Effects of Coordinating Macro-Prudential Rule and Monetary Policy." Journal of Advanced Computational Intelligence and Intelligent Informatics 23, no. 4 (July 20, 2019): 686–94. http://dx.doi.org/10.20965/jaciii.2019.p0686.
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We develop a new Keynesian model featuring a dual-pillar monetary policy. We employ this framework to analyze the effects of coordinating macro-prudential rule and monetary policy in China using different tools. The simulation results show that: (1) adopting macro-prudential rule and monetary policy simultaneously can achieve a more stable economic environment than using monetary policy alone; (2) a price-based monetary policy is more effective in stabilizing economic fluctuations than a quantity-based monetary policy when considering the macro-prudential policy; (3) the combination of quantity-based monetary policy and macro-prudential rule can stabilize housing prices and credit growth better than the price-based tools. The study shows that when house prices rise rapidly owing to external shocks, adopting the quantity-based policy instruments and macro-prudential policy is a wise choice. When the financial condition is stable, the combination of price-based instruments and macro-prudential rule is better.