Monetary Analysis at Central Banks

herausgegeben von: David Cobham

Verlag: Palgrave Macmillan UK

Enthalten in: Springer Professional "Wirtschaft+Technik" , Springer Professional "Wirtschaft"

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Über dieses Buch

Whatever happened to the money supply? This book explains how the analysis of monetary and credit aggregates is undertaken at the Bank of England, the European Central Bank and (as an example of a developing country) the Bank of Tanzania. The book also explores how this analysis relates to these central banks' monetary policy strategies and how it feeds into policymaking. An editorial introduction provides the intellectual and historical background – from the contributions of key economists such as Milton Friedman and Jacques Polak, to monetary targeting and inflation targeting – and argues that central banks and policy analysts would be foolish to neglect the insights monetary analysis can offer. The papers compiled in Monetary Analysis at Central Banks demonstrate just how useful and varied those insights are.

Inhaltsverzeichnis

Frontmatter

Chapter 1. Monetary Analysis and Central Banks: Introduction

Abstract

Intellectual and historical background, with particular reference to the high-powered money multiplier analysis developed by Friedman and his associates; the Polak model developed at the International Monetary Fund (IMF), which served as the basis for IMF financial programming; the credit counterparts/flow of funds approach used more in Europe, including the UK; the rationale for and experience of monetary targeting, from adoption to abandonment, with particular attention to the USA and France; the experience of developing/emerging countries with an emphasis on data availability and an example in the form of Egypt; and the role of quantitative easing in a possible revival of interest in monetary analysis.

David Cobham

Chapter 2. The Analysis of Money and Credit During the Financial Crisis: The Approach At the Bank of England

Abstract

This chapter discusses the empirical analysis of money and credit undertaken at the Bank of England during the financial crisis and how it is used. An aggregate structural vector autoregression sVAR including money is employed to analyse the impact of quantitative easing (QE), as a crosscheck on other approaches focussing on the impact on financial market prices. Sectoral models of money and credit are used to assess the impact of the crisis and the associated shock to credit conditions. The contraction in the supply of credit to each sector can explain a substantial proportion of the shortfall in GDP relative to its pre-crisis trend. The shocks can also explain a large part of the fall in credit and much of the contraction in the customer funding gap.

Jon Bridges, James Cloyne, Ryland Thomas, Alex Tuckett

Chapter 3. Central Banks as Balance Sheets of Last Resort: The ECB’s Monetary Policy in a Flow-of-Funds Perspective

Abstract

This chapter reviews the ECB’s non-standard monetary policy from a broad flow-of-funds perspective and analyses the central bank’s use of its own balance sheet as a policy instrument, in particular its operation as a ‘balance sheet of last resort’ in a crisis, at times when other sectors are under pressure to deleverage and regular transmission of monetary policy via banks and financial markets is impaired. It also proposes the concept of ‘contingent easing’, and examines the extent to which the ECB was able to reach the real economy. Comparisons with the unconventional policies of the US Federal Reserve are provided, where useful, to illustrate the specificity of the ECB’s non-standard measures in the Euro Area economic context.

Philippine Cour-Thimann, Bernhard Winkler

Chapter 4. Evolving Monetary Policy Frameworks in Low-Income Countries: The Tanzanian Experience

Abstract

This chapter describes the evolution of monetary policy in Tanzania since the mid-1990s, when the Bank of Tanzania pursued a conventional reserve money programme, with broad money as the intermediate anchor for inflation and reserve money growth as the principal policy instrument. While this approach, and a managed floating exchange rate regime, supported a sustained period of high economic growth, the increased globalization of Tanzania’s economy and the associated move towards greater capital account openness has prompted the Bank of Tanzania to embark on a transition towards a price-based monetary policy framework, in which the money aggregates are replaced by an explicit inflation target and a greater reliance is placed on the short-term interest rate as the main policy instrument.

Christopher Adam, Pantaleo Kessy, Ben Langford

Backmatter

Titel: Monetary Analysis at Central Banks
herausgegeben von: David Cobham
Verlag: Palgrave Macmillan UK
Electronic ISBN: 978-1-137-59335-1
Print ISBN: 978-1-137-59334-4
DOI: https://doi.org/10.1057/978-1-137-59335-1

Springer Professional

Über dieses Buch

Inhaltsverzeichnis

Frontmatter

Chapter 1. Monetary Analysis and Central Banks: Introduction

Chapter 2. The Analysis of Money and Credit During the Financial Crisis: The Approach At the Bank of England

Chapter 3. Central Banks as Balance Sheets of Last Resort: The ECB’s Monetary Policy in a Flow-of-Funds Perspective

Chapter 4. Evolving Monetary Policy Frameworks in Low-Income Countries: The Tanzanian Experience

Backmatter

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