Description

This unit examines a number of issues related to the conduct of monetary and financial policies. Topics covered include the definition of money, monetary targets and instruments, the indicator problem; decision making under uncertainty, policy reaction functions; the government budget constraint; control of monetary aggregates; rules versus discretion, nominal income, inflation and exchange rate targeting.

Topics

• Definition of Money
• Monetary Targets and Instruments
• Monetary Policy Indicator Problem
• Monetary Policy Under Uncertainty
• Monetary Policy Reaction Functions
• Rational Expectations and Monetary Policy
• Control of Monetary Aggregates
• Monetary Rules versus Discretion
• Interest Rate Targeting
• Exchange Rate Targeting
• Nominal Income Targeting
• Inflation Targeting