The main aim of this course is to analyse the goals of monetary policy and to review the instruments available to central banks in order to pursue these goals. It will focus on the transmission mechanisms of monetary policy and the differences between monetary policy rules and discretionary policy. It will also make connections between theoretical economic concepts and current real world issues.
This lecture will introduce the fundamentals of monetary economics and explain the working and impact of monetary policy. The main aim of this course is to describe and analyze the goals of monetary policy and to review the instruments available to central banks in order to pursue these goals. It will focus on the transmission mechanisms of monetary policy, the effectiveness of monetary policy actions, the differences between monetary policy rules and discretionary policy, as well as in institutional issues concerning central banks, transparency of monetary authorities and monetary policy in a monetary union framework. Moreover, we discuss the implementation of monetary policy in practice and the design of optimal policy.
For the functioning of today’s economy, central banks and their policies play an important role. Monetary policy is the policy adopted by the monetary authority of a country, the central bank. The central bank controls either the interest rate payable on very short-term borrowing or the money supply, often targeting inflation or the interest rate to ensure price stability and general trust in the currency. This monetary policy course looks into today’s major questions related to policies of central banks. It provides insights into the monetary policy process using core economic principles and real-world examples.