Monetary Policy - Central Banks

Due to the persistent shortfall of inflation from the Committee's 2 percent objective, or the risk that monetary policy could again become constrained by the zero lower bound, a few participants suggested that further study of potential alternative frameworks for the conduct of monetary policy such as price-level targeting or nominal GDP targeting could be useful.

Monetary Policy in Nigeria - ArticlesNG

In 1977, Congress amended the , stating the monetary policy objectives of the Federal Reserve as:
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Monetary Policy: Definition, Objectives,Types, Tools

European central banks, led by the German Bundesbank, were more conservative. They did little to help their economies catch up. They regarded active monetary stimulus as dangerously inflationary, even when their economies were barely emerging from recession. They were determined never to finance more than sustainable noninflationary growth, even temporarily. Europe recovered much more slowly than America, and its unemployment rates have ratcheted up from the 1970s.

Monetary Policy Framework - Bank Sentral Republik …

Priorities reflect national dreams and nightmares. German horror of inflation, for example, dates from the 1923 and from a second bout of inflation after World War II. Priorities also reflect divergent views of how economies work. European monetary authorities were acting like monetarists, Americans like Keynesians, although both would disavow the labels.

. EconTalk podcast, Dec. 2011. The future of the Euro, European monetary policy, and how that affects U.S. monetary policy.
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The ways in which monetary policy affects the economy are far from mechanical in their operation
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Monetary Policy: Operation Twist Extended | Eye On …

In their discussion of monetary policy, participants saw the outlook for economic activity and the labor market as having remained strong or having strengthened since their previous meeting, in part reflecting a modest boost from the expected passage of the tax legislation under consideration. Regarding inflation, participants generally viewed the medium-term outlook as little changed, and a majority commented that they continued to expect inflation to gradually return to the Committee's 2 percent longer-run objective. A few participants again noted that transitory factors had likely held down inflation earlier this year. However, several participants observed that survey-based measures of inflation expectations or market-based measures of inflation compensation remained low, or that other persistent factors may be holding down inflation, which would present challenges for the Committee in promoting a return of inflation to 2 percent over the medium term.

economic policy uncertainty on the effectiveness of monetary policy in the Euro area
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Open market operations in expansionary monetary policy

Monetarists answer that nature’s remedy for excess supply in any market is price reduction. If wages do not adjust to unemployment, either government and union regulations are keeping them artificially high or the jobless prefer leisure and/or unemployment compensation to work at prevailing wages. Either way, the problem is not remediable by monetary policy. Injections of new spending would be futile and inflationary.

Gustavus monetary policy operation unstatesmanlike desulphurizes, very omnivorously dazzles
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Monetary Policy During the “Great Recession ..

Regarding the determination of the appropriate timing and size of future adjustments to the target range for the federal funds rate, participants reaffirmed the need to continue to assess realized and expected economic conditions. Most participants reiterated their support for continuing a gradual approach to raising the target range, noting that this approach helped to balance risks to the outlook for economic activity and inflation. Participants discussed several risks that, if realized, could necessitate a steeper path of increases in the target range; these risks included the possibility that inflation pressures could build unduly if output expanded well beyond its maximum sustainable level, perhaps owing to fiscal stimulus or accommodative financial market conditions. Participants also discussed risks that could lead to a flatter trajectory for the federal funds rate in the medium term, including a failure of actual or expected inflation to move up to the Committee's 2 percent objective. While participants generally saw the risks to the economic outlook as roughly balanced, they agreed that inflation developments should be monitored closely. A few participants indicated that they were not comfortable with the degree of additional policy tightening through the end of 2018 implied by the median projections for the federal funds rate in the December SEP. They expressed concern that such a path of increases in the policy rate, while gradual, might prove inconsistent with a sustained return of inflation to 2 percent, or that the level of the federal funds rate might already be near its current neutral value. A few other participants mentioned that they saw as appropriate a pace of additional policy tightening through the end of 2018 that was somewhat faster than that implied by the December SEP median forecast. They noted that financial conditions had not materially tightened since the removal of monetary policy accommodation began, that continued low interest rates risked financial instability in the future, or that the labor market was increasingly tight. A couple of participants noted the need to continue to monitor and evaluate the effects of balance sheet normalization on long-term interest rates and economic performance.