I Indicators of Monetary Policy : The View from Implicit Feedback Rules
نویسنده
چکیده
FREQUENTLY CITED THEORETICAL framework for the conduct of monetary policy consists of a policy instrument, an intermediate policy target and a long-run policy objective. The policy instrument is a lever which the central bank can manipulate to achieve its intermediate target. Possible choices for the policy instrument include the quantity of bank reserves, the monetary base (hank reserves plus currency in circulation) or a short-term interest rate. Monetary policymakers aim at a value of the intermediate target variable that will make current monetary policy consistent with a longrun policy objective, such as price stability.1 Potential intermediate target variables include nominal gross domestic product (GUP) and monetary aggregates. Ideally, the intermediate target variable is both responsive to policy actions and closely related to inflation in the long run.
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