The territorial Executive shall be consulted with respect to decisions on monetary policy.

Monetary policy and institutions

China s Monetary Policy Surprise

China s Monetary Policy Choice

The currency was in theory governed by a rules based Currency Board, which the British invented for their smaller colonies. It tied the local currency to the British Pound, giving local authorities no discretion in monetary policy.

What Monetary Policy Does China Need?

On the one hand, pegging local currencies to the dollar renders monetary policy completely ineffective, as in a fixed exchange rate regime.

Expressing its concern about the poor representation of women in economic decision making, including in the formulation of monetary and fiscal policies as well as rules governing pay,

Shinzo Abe s Monetary Policy Delusions

It is time to adjust monetary policy.

Moreover, unlike major developed economies, most of which have used up all of their conventional monetary policy ammunition by reducing their policy interest rates to zero, China has plenty of monetary stimulus on reserve to address cyclical disruptions. In these circumstances, it makes sense for China to lean more on monetary policy than on fiscal expansion.

In China, unlike in advanced countries, monetary and sterilization policy are often one in the same. The degree to which monetary policy is expansionary depends on the degree to which the liquidity created by currency market intervention has been sterilized.

The International Monetary Fund continued to assist the Government, through a close policy dialogue, in maintaining macroeconomic stability, especially in the area of fiscal policy.

Why is Monetary Policy Underrated?

Is US Monetary Policy Made in China?

1. Strongly anti inflationary monetary policy.

A single monetary policy for a currency area comprising 11 and later 12 countries, each with a sovereign national government, was something entirely new. Would it be compatible with autonomous national fiscal policies?

Typically, monetary policy is one of the policy tools for managing the balance of payments.

Of course, a country s monetary policy does affect exchange rates in the short term. But it does so only in relation to monetary policy in other relevant countries.

Avoiding groupthink is essential to developing innovative, effective policies capable of responding to new monetary policy challenges and that demands a flexible, dynamic policymaking process.

That brings us to monetary policy, the importance of which as a determinant of commodity prices is often forgotten. Monetary tightening is widely anticipated in the US, with the Federal Reserve having ended quantitative easing in October and likely to raise short term interest rates sometime in the coming year.

As a result, questions about the role of monetary policy and the independence and accountability of central banks, once confined to rarefied academic discussions, are fixtures of broad policy debate. But, rather than try to define a single approach, central bankers should aim to develop individualized approaches within the orthodox monetary policy framework, which revolves around price stability and independence.

Producing countries have also tried to contain price volatility by forming international cartels. But these have seldom worked.

exchange rate and trade policies, or even the complete set of fiscal policy instruments.

There is more interest in Sarkozy s populist ideas about currency intervention and adding a new political dimension to monetary policy decisions than is commonly realized.

The IMF s Lending Overhaul

In addition to becoming bolder and more expansive, it has become increasingly intertwined with fiscal policy. This is most explicit in Japan, where monetary policy is a central component of Prime Minister Shinzo Abe s economic strategy, dubbed Abenomics, implying collaboration between the government and the central bank.

These exclusive affairs of State include external relations, defence policy and monetary policy.

He's the viceroy. He has to decide on tax policy, on currency, on border patrol, on policing. He has to make all these judgments.

China s monetary and foreign exchange policies are now in a state of limbo. Instead of stable guidelines with a well defined monetary (exchange rate) anchor and a firm mandate to complete financial liberalization, China s macroeconomic and financial decision making will be ad hoc and anybody s guess as was true, and still is, for Japan.

China s monetary and foreign exchange policies are now in a state of limbo. Instead of stable guidelines with a well defined monetary (exchange rate) anchor and a firm mandate to complete financial liberalization, China s macroeconomic and financial decision making will be ad hoc and anybody s guess as was true, and still is, for Japan.

The market had strongly expected adjustments to UK monetary policy.

The transformation in China s banking system, coupled with the recent decision to revalue China s currency, will require major changes in the conduct of monetary policy. Until recently, an exchange rate peg dominated China s monetary policy, with interest rates unchanged for nine years until October 2004, as the government attempted to manage lending through administrative guidance and credit controls.

We have tightened fiscal and monetary policies, and we are monitoring them very closely.

Our stable macro economic situation is the outcome of a mix of prudent monetary and fiscal policies.

Monetary policy needs to look beyond its core focus on low and stable inflation and pay much greater attention to financial stability. The debate now is how, exactly, to factor this imperative into monetary policy, and how to coordinate the work of monetary and regulatory authorities.

By contrast, the defining event shaping European monetary policy is the hyperinflation of the 1920 s, filtered through the experience of the 1970 s and 1980 s, when central banks were enlisted once again to finance budget deficits and again with inflationary consequences. Indeed, delegating national monetary policies to a Europe wide central bank was intended to solve precisely this problem.

At the heart of the debate currently being conducted within leading economies treasuries and central banks, as well as in supranational bodies such as the International Monetary Fund and the BIS is the relationship between monetary policy and financial stability. The BIS, for example, has suggested that financial stability is closely connected with monetary policy, and has advised policymakers to start weaning their economies off of easy money sooner rather than later.

But, it has recognised the need to include monetary analysis in a very broad sense into its policy considerations. And the strategy was flexible enough to integrate the broadening and deepening of both the monetary and economic analysis.

The ECB has never claimed that its strategy is the ultimate solution to the challenges monetary policy is confronted with. But, it has recognised the need to include monetary analysis in a very broad sense into its policy considerations.

Domestic monetary policy has become the first and last line of defense against growth slowdowns and financial panics, enabling policymakers to avoid pursuing other important, but far more difficult measures. Using monetary policy to compensate for deficiencies in other policy areas constitutes an institutional breakdown monetary policymakers are not necessarily getting it wrong, but they are constrained by the configuration of other policies.

But the decisions that Scotland would have to make about its monetary arrangements in the months following a vote for independence are at least as likely to be confronted by some eurozone countries over the next couple of years. In fact, there is a natural link between the two situations.

Still to be argued out within the guild of economists , Samuelson wrote in 1969, is the proper quantitative potency of monetary versus fiscal policy. This question eventually was resolved in favor of monetary policy.

Yet widespread concerns persist. The International Monetary Fund for example, has argued that any rate hike by the Fed would need an effective monetary policy communication strategy a polite way of saying that any monetary tightening in the US and other advanced economies would be premature.

There is no easy answer not least because of the wide range of factors contributing to the trend. Beyond public sector underinvestment, there is monetary policy, which, whatever its benefits and costs, has shifted corporate use of cash toward stock buy backs, while real investment has remained subdued.