Author Question: Until the 1990s, how was monetary policy typically conducted in advanced countries? What will be ... (Read 43 times)

gbarreiro · **on:** Jun 30, 2018

Until the 1990s, how was monetary policy typically conducted in advanced countries?

What will be an ideal response?

Question 2

What are some of the questions about the macro prudential tools?

What will be an ideal response?

laurnthompson · **Reply #1 on:** Jun 30, 2018

Answer to Question 1

1 ) The central bank chose a target rate for nominal money growth corresponding to the inflation rate it wanted to achieve in the medium run. 2 ) In the short run, the central bank allowed for deviations of nominal money growth from the target. 3 ) To communicate to the public both what it wanted to achieve in the medium run and what it intended to do in the short run, the central bank announced a range for the rate of nominal money growth it intended to achieve.

Answer to Question 2

1 ) In many cases we do not know how well these tools work; 2 ) there are likely to be complex interaction between the traditional monetary policy tools and these macro prudential tools. 3 ) Whether macro prudential tools should be under the control of the central bank or under the control of a separate authority.